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

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  • Nuño, Galo
  • Moro, Alessio
  • Tedde, Pedro

Abstract

We document the twin crisis that affected Spain in the mid-1860s. First, we trace back its origins to the international crisis of 1864-66. Next, we describe the particular banking sector of Spain, characterized by the coexistence of the Bank of Spain with multiple local banks of issue. We analyze the microeconomic behavior of each bank in response to the crisis and find that, overall, the banks of issue performed well during the crisis. The Bank of Spain resulted as the most destabilizing institute due to its involvement with a Government on the brink of default. JEL Classification: N13, N23, E31, E5

Suggested Citation

  • Nuño, Galo & Moro, Alessio & Tedde, Pedro, 2013. "A twin crisis with multiple banks of issue: Spain in the 1860s," Working Paper Series 1561, European Central Bank.
  • Handle: RePEc:ecb:ecbwps:20131561
    Note: 2253012
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    References listed on IDEAS

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    Cited by:

    1. Pablo Martín-Aceña, 2018. "Money in Spain. New historical statistics. 1830-1998," Working Papers 1806, Banco de España.
    2. Concha Betrán & Maria A. Pon, 2019. "Capital Flow Bonanzas as a Fundamental Ingredient in Spain’s Financial Crises, 1850-2015," Working Papers 0164, European Historical Economics Society (EHES).
    3. Prados de la Escosura, Leandro, 2018. "Foreign Capital in 19th Century Spain's Investment Boom," IFCS - Working Papers in Economic History.WH 26196, Universidad Carlos III de Madrid. Instituto Figuerola.
    4. Carlos Marichal, 2014. "Historical reflections on the causes of financial crises: Official investigations, past and present, 1873–2011," Investigaciones de Historia Económica - Economic History Research (IHE-EHR), Journal of the Spanish Economic History Association, Asociación Española de Historia Económica, vol. 10(02), pages 81-91.
    5. Pablo Martín-Aceña, 2017. "THE BANCO DE ESPAÑA, 1782-2017. The history of a central bank," Estudios de Historia Económica, Banco de España, number 73, November.

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    More about this item

    Keywords

    financial crisis; Gurney and Co; Lender of Last Resort; Overend; sudden stop;
    All these keywords.

    JEL classification:

    • N13 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: Pre-1913
    • N23 - Economic History - - Financial Markets and Institutions - - - Europe: Pre-1913
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit

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