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Banking crises and the international monetary system in the Great Depression and now

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  • Moessner, Richhild
  • Allen, William A.

Abstract

We identify similarities and differences in the scale and nature of the banking crises in 2008-9 and the Great Depression, and analyse differences in the policy response to the two crises in light of the prevailing international monetary systems. We find that the scale of the banking crisis, as measured by falls in international short-term indebtedness and total bank deposits, was smaller in 2008-9 than in 1931. However, central bank liquidity provision was larger in the flexible exchange rate environment of 2008-9 than in 1931, when it had been constrained in many countries by the gold standard.

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  • Moessner, Richhild & Allen, William A., 2011. "Banking crises and the international monetary system in the Great Depression and now," Financial History Review, Cambridge University Press, vol. 18(01), pages 1-20, April.
  • Handle: RePEc:cup:fihrev:v:18:y:2011:i:01:p:1-20_00
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    1. Allen, William A. & Moessner, Richhild, 2012. "The international propagation of the financial crisis of 2008 and a comparison with 1931," Financial History Review, Cambridge University Press, vol. 19(02), pages 123-147, August.
    2. Domanski, Dietrich & Moessner, Richhild & Nelson, William R., 2014. "Central banks as lender of last resort: experiences during the 2007-2010 crisis and lessons for the future," Finance and Economics Discussion Series 2014-110, Board of Governors of the Federal Reserve System (U.S.).
    3. Ciobanu (Sireteanu) Elena, 2011. "The Impact Of The Financial And Economic Global Crisis Over The Romanian Banking System," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(2), pages 406-412, December.
    4. Bindseil, Ulrich & Winkler, Adalbert, 2012. "Dual liquidity crises under alternative monetary frameworks: a financial accounts perspective," Working Paper Series 1478, European Central Bank.
    5. Cristina Peicuti, 2014. "The Great Depression and the Great Recession: A Comparative Analysis of their Analogies," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 11(1), pages 55-78, June.
    6. Alexander Smirnov, 2016. "A Simple Model of Credit Expansion," Papers 1609.05055, arXiv.org.
    7. Winkler, Adalbert & Bindseil, Ulrich, 2012. "Dual liquidity crises under alternative monetary frameworks," Annual Conference 2012 (Goettingen): New Approaches and Challenges for the Labor Market of the 21st Century 62032, Verein für Socialpolitik / German Economic Association.
    8. Dietrich Domanski & Richhild Moessner & William Nelson, 2014. "Central banks as lenders of last resort: experiences during the 2007-10 crisis and lessons for the future," BIS Papers chapters,in: Bank for International Settlements (ed.), Re-thinking the lender of last resort, volume 79, pages 43-75 Bank for International Settlements.
    9. Kris James Mitchener & Gary Richardson, 2016. "Network Contagion and Interbank Amplification during the Great Depression," NBER Working Papers 22074, National Bureau of Economic Research, Inc.

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