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Money and Credit: Lessons of the Irish bank strike of 1970

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  • Malte Krüger

Abstract

In Ireland, there was a bank strike that led to a complete shut-down of the main part of the banking system from May to November 1970. The effects of this strike were surprisingly limited. This had led some observers to conclude that trade credit can easily substitute for bank deposits as a means of payment. In this paper, it is shown why it was possible to continue “business as usual” for an extended period of time. Subsequently, it is argued that such a situation would not have prevailed much longer. Due to rising risks for almost all transactors the use of trade credit would have declined and economic performance would have deteriorated progressively.

Suggested Citation

  • Malte Krüger, 2017. "Money and Credit: Lessons of the Irish bank strike of 1970," ROME Working Papers 201713, ROME Network.
    • Handle: RePEc:rmn:wpaper:201713
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    References listed on IDEAS

    as
    1. Murphy, Antoin E, 1978. "Money in an Economy without Banks: The Case of Ireland," The Manchester School of Economic & Social Studies, University of Manchester, vol. 46(1), pages 41-50, March.
    2. Fama, Eugene F., 1980. "Banking in the theory of finance," Journal of Monetary Economics, Elsevier, vol. 6(1), pages 39-57, January.
    3. Kelly, John, 2003. "The Irish Pound: From Origins to EMU," Quarterly Bulletin Articles, Central Bank of Ireland, pages 89-115, March.
    4. Kiyotaki, Nobuhiro & Wright, Randall, 1993. "A Search-Theoretic Approach to Monetary Economics," American Economic Review, American Economic Association, vol. 83(1), pages 63-77, March.
    5. Manning, Mark & Nier, Erlend & Schanz, Jochen (ed.), 2009. "The Economics of Large-value Payments and Settlement: Theory and Policy Issues for Central Banks," OUP Catalogue, Oxford University Press, number 9780199571116, Decembrie.
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    More about this item

    Keywords

    money; banking; payments; clearing&settlement; Ireland; trade credit;
    All these keywords.

    JEL classification:

    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • E59 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Other
    • E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • N14 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: 1913-

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