International Banking and Transmission of the 1931 Financial Crisis

Olivier Accominotti

No 11651, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: In May-July 1931, a series of financial panics shook Central Europe before spreading to the rest of the world. This paper explores how the 1931 Central European crisis propagated to the London and New York financial centers; it also examines the role of cross-border banking linkages in international crisis transmission. Using archival bank-level data, I document US and British banks’ asset-side exposure to the crisis region. The Continental crisis disturbed few US banks but endangered several British financial institutions and triggered severe stress in the London money market. Central European credits were mostly held by large and diversified commercial banks in the United States and by small and geographically specialized financial institutions in Britain. Differences in the market structure of the trade finance industry explain why the 1931 Central European crisis infected London banks but not New York banks.

Keywords: International contagion; Trade finance; 1931 crisis; Cross-border banking (search for similar items in EconPapers)
JEL-codes: F34 G21 N22 N24 (search for similar items in EconPapers)
Date: 2016-11
New Economics Papers: this item is included in nep-his, nep-mon and nep-pay
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: International banking and transmission of the 1931 financial crisis (2019)
Working Paper: International banking and transmission of the 1931 financial crisis (2019)
Working Paper: International banking and transmission of the 1931 financial crisis (2016)
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