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Two depressions, one banking collapse: Lessons from Australia

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  • Kent, Christopher John
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    Abstract

    In Australia, the 1890s depression was associated with a banking system collapse, whereas financial problems during the 1930s depression were far less severe. While the behaviour of the financial sector was obviously pro-cyclical during the 1890s episode, there were signs of more prudent behaviour and stronger financial institutions leading up to the 1930s depression. This change was aided by a change in the competitive environment and by the experience of the preceding financial crisis. The lessons from Australia's depression experiences are of relevance to debates about the causes of the current global financial crisis and required regulatory reforms.

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of Financial Stability.

    Volume (Year): 7 (2011)
    Issue (Month): 3 (August)
    Pages: 126-137

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    Handle: RePEc:eee:finsta:v:7:y:2011:i:3:p:126-137

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    Web page: http://www.elsevier.com/locate/jfstabil

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    Keywords: Financial crises Prudential behaviour Competition;

    References

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    1. Schedvin, C B, 1973. "A Century of Money in Australia," The Economic Record, The Economic Society of Australia, vol. 49(128), pages 588-605, December.
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    6. D.T. Merrett, 1991. "FINANCIAL INSTITUTIONS UNDER PRESSURE: ARE THE RIGHT LESSONS BEING LEARNT FROM THE 1890s?," Economic Papers, The Economic Society of Australia, vol. 10(1), pages 1-10, 03.
    7. Crosby, M., 1995. "Monetary Factors in the Great Depression in Australia," Papers 95-8, New South Wales - School of Economics.
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    12. Boehm, E A, 1973. "Australia's Economic Depression of the 1930s," The Economic Record, The Economic Society of Australia, vol. 49(128), pages 606-23, December.
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    Cited by:
    1. Tim Atkin & Mark Caputo & Tim Robinson & Hao Wang, 2014. "Macroeconomic Consequences of Terms of Trade Episodes, Past and Present," CEH Discussion Papers 22, Centre for Economic History, Research School of Economics, Australian National University.
    2. Tom Cusbert & Thomas Rohling, 2013. "Currency Demand during the Global Financial Crisis: Evidence from Australia," RBA Research Discussion Papers rdp2013-01, Reserve Bank of Australia.

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