Flight‐to‐safety and the credit crunch: a new history of the banking crises in France during the Great Depression
Eric Monnet
- Fonction : Auteur
- PersonId : 743081
- IdHAL : eric-monnet
- ORCID : 0000-0003-1445-8883
- IdRef : 127336184
Angelo Riva
- Fonction : Auteur
- PersonId : 1158768
- ORCID : 0000-0003-3301-2297
- IdRef : 109151046
Résumé
Despite France's importance in the interwar world economy, the scale of the French banking crises of 1930–1 and their consequences have never been fully assessed quantitatively. The lack of banking regulation severely limited the availability of balance sheet data. Using a new dataset of individual balance sheets from more than 300 banks, this article shows that the crises were much more severe than previously thought, although they did not affect the main commercial banks. By reconstructing financial flows, this study shows that the fall in bank credit was mostly driven by a flight‐to‐safety by deposits, from banks to savings institutions and the central bank. The decrease in bank deposits due to bank runs was offset by an increase in deposits with savings institutions, with the central bank, and in cash hoarding, whereas the decrease in bank credit was not offset by an increase in loans from non‐bank financial institutions. In line with the gold standard mentality, cash deposited with savings institutions and the central bank was used to decrease marketable public debt and increase gold reserves, rather than pursuing countercyclical policies. Despite massive capital inflows and rising aggregate money supply, France suffered from a severe, persistent credit crunch.
Domaines
Economies et financesFormat du dépôt | Notice |
---|---|
Type de dépôt | Article dans une revue |
Résumé |
en
Despite France's importance in the interwar world economy, the scale of the French banking crises of 1930–1 and their consequences have never been fully assessed quantitatively. The lack of banking regulation severely limited the availability of balance sheet data. Using a new dataset of individual balance sheets from more than 300 banks, this article shows that the crises were much more severe than previously thought, although they did not affect the main commercial banks. By reconstructing financial flows, this study shows that the fall in bank credit was mostly driven by a flight‐to‐safety by deposits, from banks to savings institutions and the central bank. The decrease in bank deposits due to bank runs was offset by an increase in deposits with savings institutions, with the central bank, and in cash hoarding, whereas the decrease in bank credit was not offset by an increase in loans from non‐bank financial institutions. In line with the gold standard mentality, cash deposited with savings institutions and the central bank was used to decrease marketable public debt and increase gold reserves, rather than pursuing countercyclical policies. Despite massive capital inflows and rising aggregate money supply, France suffered from a severe, persistent credit crunch.
|
Titre |
en
Flight‐to‐safety and the credit crunch: a new history of the banking crises in France during the Great Depression
|
Auteur(s) |
Patrice Baubeau
1
, Eric Monnet
2, 3
, Angelo Riva
2, 3, 4
, Stefano Ungaro
2, 3
1
IDHES -
Institutions et Dynamiques Historiques de l'Économie et de la Société
( 243735 )
- Université Paris Ouest Nanterre La Défense bât T., bureau 218 200 avenue de la République 92000 Nanterre
-IDHE.S-Evry - Université d¹Evry Val d¹Essonne - BD François Mitterand - 91000 Evry
- France
2
PSE -
Paris School of Economics
( 301309 )
- 48 boulevard Jourdan 75014 Paris
- France
3
PJSE -
Paris Jourdan Sciences Economiques
( 578027 )
- 48 boulevard Jourdan 75014 Paris
- France
4
EBS Paris -
European Business School Paris
( 192527 )
- 10 Rue Sextius Michel, 75015 Paris
- France
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Date de publication |
2021-02
|
Volume |
74
|
Numéro |
1
|
Page/Identifiant |
223-250
|
Langue du document |
Anglais
|
Nom de la revue |
|
Vulgarisation |
Non
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Comité de lecture |
Oui
|
Audience |
Internationale
|
Public visé |
Scientifique
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URL éditeur |
https://onlinelibrary.wiley.com/doi/10.1111/ehr.12972
|
Domaine(s) |
|
DOI | 10.1111/ehr.12972 |
UT key WOS | 000552326800001 |
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