Banking crises in the late 19th century in Germany and France: lessons for today

This Economic Policy Seminar discussed banking crises in the late 19^th century and what they can teach us about today’s financial crisis.

Two leading experts on banking history, Carsten Burhop from the University of Cologne and Max Planck Institute and Pierre-Cyrille Hautcoeur from the Paris School of Economics, presented recent findings on Germany and France. The presentation on France focused on the emergence of the Banque de France as a lender of last resort: how it had to modify its policy and instruments in order to deal with potential systemic shocks, starting in 1882 and 1889. It analyzed how in 1882, a major stock exchange crash and the default of a very large bank led to a multi-year depression and how the Banque de France dealt with the shock as well as the shock of 1889, when another top bank was on the verge of failure. As regards Germany, the focus was on the 1873 crises, which saw a large number of German banks fail. It discussed the causes of the crises as well as the institutional and regulatory responses to the crisis. The presentations were discussed by Marie Donnay from the European Commission. Both presentations as well as the discussant have drawn parallels with today's crisis and today's regulatory response.

The event was moderated by Bruegel Research Fellow Guntram Wolff.

Presentations

Carsten Burhop here
Pierre-Cyrille Hautcoeur here

Summary here