The London money market and non-British bank lending during the frst globalisation: evidence from Brazil

Wilfried Kisling () and Marco Molteni ()
Additional contact information
Wilfried Kisling: Faculty of History, University of Oxford, Oxford, UK ; WU Wirtschaftsuniversität Wien, Vienna, Austria
Marco Molteni: Faculty of History, University of Oxford, Oxford, UK ; Geneva Graduate Institute, Geneva, Switzerland

Cliometrica, Journal of Historical Economics and Econometric History, 2025, vol. 19, issue 1, 81-122

Abstract: This study examines the relationship between the London money market (LMM) and the credit provision of non-British overseas banks in peripheral economies during the frst wave of globalisation. Using monthly data between 1889 and 1913, we fnd a positive relationship between the amount of credit authorised by the German Brasilianische Bank für Deutschland in Brazil and the spread between the London market and foating rate. Our results suggest that increased demand for foreign bills and/or decreased borrowing costs in the LMM leads to an increase in credit supply. We use the impact of annual tax payments on the spread between the market and foating rate as an instrumental variable (IV) to show that this relationship is causal. Although there is a signifcant amount of literature on London’s historic role as a global fnancial centre and a growing number of studies on foreign banking history, little quantitative evidence is available about the connection between the two. This study bridges this gap.

Keywords: London; money; market; ·; First; wave; of; globalisation; ·; Non-British; overseas; banks; ·; German; foreign; banks; ·; Sterling; dominance; ·; International; banking; before; 1914 (search for similar items in EconPapers)
JEL-codes: E44 F34 G15 G21 N23 N26 (search for similar items in EconPapers)
Date: 2025
References: View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1007/s11698-024-00284-5 (application/pdf)
Access to full text is restricted to journal subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:afc:cliome:v:19:y:2025:i:1:p:81-122

Access Statistics for this article

Cliometrica, Journal of Historical Economics and Econometric History is currently edited by Claude Diebolt, Dora Costa and Jean-Luc Demeulemeester

More articles in Cliometrica, Journal of Historical Economics and Econometric History from Association Française de Cliométrie (AFC) Contact information at EDIRC.
Bibliographic data for series maintained by ().