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Communication Dans Un Congrès Année : 2018

The 1930s Banking Crisis in France Revisited

Résumé

Since banking regulation was introduced in France only in 1941, little is known about the balance sheets of French banks before that date. We do not have statistical information on the difficulties of banks in France during the Great Depression of the 1930s, let alone reliable information on the causes of bankruptcy and interbank contagion. This project aims to gather many historical sources to significantly improve our knowledge of the French banking system during the interwar period and, more generally to understand the reasons for the banking crises and the historical specificity of the French banking system. Our study was made possible by the discovery of exceptional archival sources. The Crédit Lyonnais \textendash one of the four major banks \textendash collected information for around 450 banks from 1910 until 1939 and, most important, standardized balance sheets to make them comparable. We present the sources and discuss why the Crédit Lyonnais constructed such a database. The accounting choices made by the Crédit Lyonnais to standardize banks' balance sheets are telling to understand what the definition of a bank was before banking regulation was implemented. Two main conclusions stand out. First, we confirm recent analyses that \textendash contrary to the conventional wisdom \textendash had claimed that France experienced a massive series of banking failures. About one third of banks failed between 1929 and 1936. This is in sharp contrast with England, for example, where only some important merchant banks suffered (Billings and Capie, 2011). Second, we find that the banking crisis in France started just after the October 1929 stock market crash and was already very severe before the 1931 international shocks (Kreditanstalt failure and then Sterling devaluation). These two conclusions point out that the chronology of the French banking crisis differs from the chronology of other countries on one hand, and \textendash most surprisingly \textendash from the chronology of French economic cycle on the other hand (it is well-known that the Great Depression started later in France than abroad). These observations also go against the argument that attributes the difficulties of the French banking system to the Gold standard. The French 1929-1931 banking crisis was mostly due to domestic weaknesses and did not worsen in 1932-1936, while France was staying in the gold standard.

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Dates et versions

hal-04149038 , version 1 (03-07-2023)

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  • HAL Id : hal-04149038 , version 1

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Patrice Baubeau, Eric Monnet, Angelo Riva, Stefano Ungaro. The 1930s Banking Crisis in France Revisited. XVIII. World Economic History Congress (WEHC 2018), Aug 2018, Boston, United States. ⟨hal-04149038⟩
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