The Shoe That Didn't Drop: Explaining Banking Stability During the Great Depression

Richard Grossman

The Journal of Economic History, 1994, vol. 54, issue 3, 654-682

Abstract: This article attempts to account for the exceptional stability exhibited by the banking systems of Britain, Canada, and ten other countries during the Great Depression. It considers three possible explanations of stability—the structure of the commercial banking system, macroeconomic policy and performance, and lender of last resort behavior—employing data from 25 countries across Europe and North America. The results suggest that macroeconomic policy—especially exchange-rate policy—and banking structure, but not lenders of last resort, were systematically responsible for banking stability.

Date: 1994
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Persistent link: https://EconPapers.repec.org/RePEc:cup:jechis:v:54:y:1994:i:03:p:654-682_01

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