A twin crisis with multiple banks of issue. Spain in the 1860s

We create new datasets on capital flows and bank balance sheets to document how the Spanish crisis of the mid-1860s fits the main characteristics of a twin crisis. Next, we describe the particular banking system of Spain, characterized by the coexistence of the Bank of Spain with multiple local banks of issue and a number of joint-stock banks (sociedades de crédito). We analyze the microeconomic behavior of each bank and find that, overall, the banks of issue performed well during the crisis. In contrast, the crisis had a dramatic impact on the sociedades, most of which suspended payments.