Rolnick and Weber found that a sharp decline in asset prices led to bank panics and, ultimately, bank failures during the free banking era. An examination of New York and Wisconsin free bank portfolios prior to a fall in asset prices indicates banks that weathered the turmoil held significantly different portfolios than closed banks. In general, solvent banks held more loans and specie, and issued more deposits and less bank notes than closed banks.
Economopoulos, Andrew J., "Free Bank Failures in New York and Wisconsin: A Portfolio Analysis" (1990). Business and Economics Faculty Publications. 21.