["The Economic History Review, EarlyView. ", "\nAbstract\nUsing newly collected discount rate data for six Swiss cities from 1846 to 1893, we find no evidence of increasing integration during a 30‐year period of lightly regulated free banking. We attribute this to two structural issues: banks had incentives to ward off competitors by protecting their local monopolies or forming cartels, and there was always a risk (which varied across banks) that banknotes were not accepted or converted at par. We use a novel counterfactual to show that these issues increased discount rate dispersion, and argue that as a result, public regulation of payments infrastructure was necessary for money market integration.\n"]