Eligibility to the Central Bank in Times of Crises: Evidence from France, 1863–1890

Vincent Bignon and Clemens Jobst

No 20974, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We provide empirical evidence that central banks can mitigate economic crises more efficiently when they extend eligibility for their discount facility to any safe asset or solvent agent. Nineteenth-century France serves as case study to circumvent endogeneity. Following 1863, an agricultural pandemic increased defaults outside agriculture. We exploit specificities of the discount window to create exogenous variation in central bank access. Regressions show that while the demand shock brought about by the pandemic led to an increase in defaults outside agriculture by 20 percent, this effect was reduced significantly whenever a branch office of the central bank was present.

Keywords: France (search for similar items in EconPapers)
JEL-codes: E5 G28 N14 (search for similar items in EconPapers)
Date: 2025-12
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