Banking Crisis in Germany (1931) and the Road to Recovery

Financial Market Regulation in the Wake of Financial Crises: The Historical Experience Conference p. 193, 2009

12 Pages Posted: 8 Jul 2012

Date Written: April 16, 2009

Abstract

Much has already been written about the 1931 German banking crisis, hence this article will focus on two less frequently addressed aspects. With respect to the question of the direct cause of the crisis and of the run which occurred on 13 July, pertinent developments in the area of gold and foreign currency reserves immediately prior to the crisis, i.e. in the weeks preceding the collapse, will be scrutinised. Past and current experience teaches us that, from an academic perspective, it is of vital importance not just to investigate the causes of financial market crises but also to analyse the initial steps taken to overcome them. Efforts aimed at restoring public trust in the commercial banks are crucially significant in this regard. While government guarantees and financial assistance are important, they often do not per se suffice to re-establish the credibility of the affected players. In this context, there is much to be gained from assuming joint liability, in order to at least enable a resumption of interbank lending between the commercial banks. For this reason, the following article will examine a lesser known episode in German financial history, namely the Transfer Association (Überweisungsverband) of 1931 and the Akzeptbank A.G.

JEL Classification: N24

Suggested Citation

Pontzen, Martin, Banking Crisis in Germany (1931) and the Road to Recovery (April 16, 2009). Financial Market Regulation in the Wake of Financial Crises: The Historical Experience Conference p. 193, 2009, Available at SSRN: https://ssrn.com/abstract=2101727

Martin Pontzen (Contact Author)

Deutsche Bundesbank ( email )

Wilhelm-Epstein-Str. 14
Frankfurt/Main, 60431
Germany

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