The Great Expansion. The Exceptional Spread of Bank Branches in Interwar France

63 Pages Posted: 15 Nov 2021

See all articles by Emilie Bonhoure

Emilie Bonhoure

KEDGE Business School

Hadrien Clausse

Independent

Eric Monnet

Paris School of Economics (PSE)

Angelo Riva

European Business School Paris

Date Written: November 1, 2021

Abstract

France during the 1920s was characterized by exceptional expansion of bank branches, with access to banks developing rapidly in rural areas due especially to establishment of temporary branches. However, it did not translate into increased bank assets and deposits as a share of national income. The banking crisis of the Great Depression ended the network expansion and reversed part of it, but the number of bank branches remained four times greater than before the war (though the French population was similar in 1910 and 1930). The distinction between indicators of credit or deposits on GDP and indicators of the density of the banking network challenges the thesis of the Great Reversal and improves understanding of the evolution of the banking system during the interwar period. We argue that inflation and increased competition explain the disconnect between the evolution of branches and the real volume of banking activity.

Keywords: Bank Branching, Banking, French financial history, Great Depression

JEL Classification: G21, G34, N14, N24

Suggested Citation

Bonhoure, Emilie and Clausse, Hadrien and Monnet, Eric and Riva, Angelo, The Great Expansion. The Exceptional Spread of Bank Branches in Interwar France (November 1, 2021). CEPR Discussion Paper No. DP16698, Available at SSRN: https://ssrn.com/abstract=3960302

Emilie Bonhoure (Contact Author)

KEDGE Business School ( email )

Domaine de Luminy - BP 921
BP 921
Marseille, PACA 13288
France

Hadrien Clausse

Independent ( email )

Eric Monnet

Paris School of Economics (PSE) ( email )

48 Boulevard Jourdan
Paris, 75014 75014
France

Angelo Riva

European Business School Paris ( email )

37/39 Boulevard Murat
Paris, 75016
France

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