Floating a "lifeboat": The Banque de France and the crisis of 1889
Pierre-Cyrille Hautcoeur
- Fonction : Auteur
- PersonId : 19541
- IdHAL : pierre-cyrille-hautcoeur
- ORCID : 0000-0002-7094-3026
- IdRef : 08306978X
Angelo Riva
- Fonction : Auteur
- PersonId : 1158768
- ORCID : 0000-0003-3301-2297
- IdRef : 109151046
Résumé
When faced with a run on a "systemically important" but insolvent bank in 1889, the Banque de France pre-emptively organized a lifeboat to ensure that depositors were protected and an orderly liquidation could proceed. To protect the Banque from losses on its lifeboat loan, a guarantee syndicate was formed penalizing those who had participated in the copper speculation that had caused the crisis bringing the bank down. Creation of the syndicate and other actions were consistent with mitigating the moral hazard from such an intervention. This episode contrasts the advice given by Bagehot to the Bank of England to counter a panic by lending freely at a high rate on good collateral, allowing insolvent institutions to fail.
Domaines
Economies et financesFormat du dépôt | Notice |
---|---|
Type de dépôt | Article dans une revue |
Titre |
en
Floating a "lifeboat": The Banque de France and the crisis of 1889
|
Résumé |
en
When faced with a run on a "systemically important" but insolvent bank in 1889, the Banque de France pre-emptively organized a lifeboat to ensure that depositors were protected and an orderly liquidation could proceed. To protect the Banque from losses on its lifeboat loan, a guarantee syndicate was formed penalizing those who had participated in the copper speculation that had caused the crisis bringing the bank down. Creation of the syndicate and other actions were consistent with mitigating the moral hazard from such an intervention. This episode contrasts the advice given by Bagehot to the Bank of England to counter a panic by lending freely at a high rate on good collateral, allowing insolvent institutions to fail.
|
Auteur(s) |
Pierre-Cyrille Hautcoeur
1, 2
, Angelo Riva
1, 2, 3
, Eugene N. White
4, 5
1
PSE -
Paris-Jourdan Sciences Economiques
( 139754 )
- 48 boulevard Jourdan 75014 Paris
- France
2
PSE -
Paris School of Economics
( 301309 )
- 48 boulevard Jourdan 75014 Paris
- France
3
IREBS -
Institut de recherche de l'European Business School
( 56256 )
- 37/39, boulevard Murat 75016 Paris
- France
4
Department of Economics
( 172152 )
- Rutgers University Newark Blumenthal Hall 249 University Ave. Newark, NJ 07102-1896
- États-Unis
5
NBER -
The National Bureau of Economic Research
( 340636 )
- Main Office National Bureau of Economic Research
NBER
1050 Massachusetts Avenue
Cambridge, Massachusetts, MA 02138
- États-Unis
|
Langue du document |
Anglais
|
Nom de la revue |
|
Vulgarisation |
Non
|
Comité de lecture |
Oui
|
Audience |
Non spécifiée
|
Date de publication |
2014-07
|
Volume |
65
|
Page/Identifiant |
104-119
|
Domaine(s) |
|
Financement |
|
Mots-clés |
en
Central bank, Banque de France, Panic, Lender of last resort, Bagehot, Financial crisis, Lifeboat, SIFI
|
DOI | 10.1016/j.jmoneco.2014.04.015 |
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