The Highs and the Lows: Bank failures in Sweden through inflation and deflation, 1914-1926

Seán Kenny, Anders Ögren, Liang Zhao

Forskningsoutput: TidskriftsbidragArtikel i vetenskaplig tidskriftPeer review

Sammanfattning

This paper revisits the Swedish banking crisis (1919–1926) that materialized as post-war deflation replaced wartime inflation (1914–1918). Inspired by Fisher’s “debt deflation theory,” we employ survival analysis to “predict” which banks would fail, given certain exante bank characteristics. Our tests support the theory; maturity structures mattered most in a regime of falling prices, with vulnerable shorter-term customer loans and bank liabilities representing the most consistent cause of bank distress in the crisis. Similarly, stronger growth in (1) leverage, (2) weaker collateral loans, and (3) foreign borrowing during the boom were all associated with bank failure.
Originalspråkengelska
Sidor (från-till)223-249
Antal sidor27
TidskriftEuropean Review of Economic History
Volym27
Nummer2
Tidigt onlinedatum2023 mars 8
DOI
StatusPublished - 2023

Ämnesklassifikation (UKÄ)

  • Ekonomisk historia

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