Public debt as private liquidity
The Poincaré experience (1926–1929)
Bibliographic Data
| ID | 21604909 |
|---|---|
| Authors | Aurélien Espic (0000-0001-6177-7946, Banque de France, corresponding author) |
| Year | 2023 |
| Volume | 30 |
| Issue | 3 |
| Pages | 308-329 |
| Publication date | 2023-12-01 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | Financial History Review (JOURNAL) |
| Journal identifiers | ISSN: 0968-5650 • E-ISSN: 1474-0052 |
| Publisher | Cambridge University Press (CUP) (PUBLISHER) |
| DOI | 10.1017/s0968565023000100 |
| OpenAlex | W4391228761 |
| Language | EN |
| References cited | 28 |
In the follow-up to the 1926 political and monetary crisis in France, a new government led by Raymond Poincaré attempted to restore monetary stability by restructuring public debt. A sinking fund was missioned to withdraw short-term public bills from money markets. This policy disorganized the largest Parisian banks of the time, as they relied on these bills to manage their liquidity. Without developed domestic money markets, no other asset could absorb the excess liquidity freed by the withdrawal of these bills, and these leading banks faced a low-rate environment. In search of yield, they expanded their activities abroad a few months before the 1929 crash. These findings renew our understanding of the expansion of France's banking sector in the 1920s. In addition, they shed new light on the role of public debt in financial stability in an open economy
Business · Debt · Economic policy · Economics · Financial system · Liquidity crisis · Market liquidity · Monetary economics · Monetary policy · Restructuring · Banking stability, regulation, efficiency · Global Financial Crisis and Policies · Political and Social Issues · Finance
La dette publique dans l’histoire
Managing the Franc Poincaré
Threat of a capital levy, expected devaluation and interest rates in France during the interwar period
Debt and Entanglements Between the Wars
Quand l'État mendie
The Aggregate Demand for Treasury Debt
Private and Public Supply of Liquidity
Public Debt as Private Liquidity
Was the franc poincaré deliberately undervalued
The bank of France and the sterilization of gold, 1926–1932
Banking, Currency and Finance in Europe between the Wars
The great expansion
Flight-to-safety and the credit crunch
| Citation velocity | historical |
|---|---|
| Highly cited | No |