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


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


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

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  • 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

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    References listed on IDEAS

    1. Galo Nuño & Carlos Thomas, 2017. "Bank Leverage Cycles," American Economic Journal: Macroeconomics, American Economic Association, vol. 9(2), pages 32-72, April.
    2. Isabel Schnabel & Hyun Song Shin, 2004. "Liquidity and Contagion: The Crisis of 1763," Journal of the European Economic Association, MIT Press, vol. 2(6), pages 929-968, December.
    3. Accominotti, Olivier, 2012. "London Merchant Banks, the Central European Panic, and the Sterling Crisis of 1931," The Journal of Economic History, Cambridge University Press, vol. 72(01), pages 1-43, March.
    4. Carmen M. Reinhart & Graciela L. Kaminsky, 1999. "The Twin Crises: The Causes of Banking and Balance-of-Payments Problems," American Economic Review, American Economic Association, vol. 89(3), pages 473-500, June.
    5. Sebastian Edwards, 2004. "Thirty Years of Current Account Imbalances, Current Account Reversals, and Sudden Stops," IMF Staff Papers, Palgrave Macmillan, vol. 51(s1), pages 1-49, June.
    6. Reinhart, Carmen & Calvo, Guillermo, 2000. "When Capital Inflows Come to a Sudden Stop: Consequences and Policy Options," MPRA Paper 6982, University Library of Munich, Germany.
    7. Schnabel, Isabel, 2004. "The German Twin Crisis of 1931," The Journal of Economic History, Cambridge University Press, vol. 64(03), pages 822-871, September.
    8. Sebastian Edwards, 2004. "Thirty Years of Current Account Imbalances, Current Account Reversals and Sudden Stops," NBER Working Papers 10276, National Bureau of Economic Research, Inc.
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    Cited by:

    1. 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.
    2. Carlos Marichal, 2014. "Historical reflections on the causes of financial crises: Official investigations, past and present, 1873–2011," Investigaciones de Historia Económica (IHE) Journal of the Spanish Economic History Association, Asociacion Espa–ola de Historia Economica, vol. 10(02), pages 81-91.
    3. repec:bde:esheco:73 is not listed on IDEAS

    More about this item


    financial crisis; Gurney and Co; Lender of Last Resort; Overend; sudden stop;

    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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