The Credit-Anstalt Crisis of 1931
Austria played a prominent role in the worldwide events of 1931 as the largest bank in Central and Eastern Europe, the Viennese Credit-Anstalt, collapsed and led Europe into a financial panic that spread to other parts of the world. The events in Austria were pivotal to the economic developments of the 1930s, yet the literature about them is sparse. This book tries to fill this gap. Aurel Schubert analyzes the crisis using the leading theories of financial crises, identifies the causes of the crisis, examines the market's efficiency in predicting events, analyzes how the crisis was transmitted to the real sector, and studies the behavior of the Austrian as well as international authorities as lenders of last resort. His main conclusion is that even sixty years after the crisis, many of its lessons are still valid. Managerial and regulatory deficiencies led to the collapse of the bank; the subsequent currency crisis was not an irrational and unexplainable panic by a confused public, but rather a rational response to inconsistencies in policy; and the reactions of the largely unprepared authorities--in Austria as well as abroad--did not help in resolving the crisis quickly.
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2 Diary of the crisis
3 Financial crisis theories and the Austrian experience of 1931
4 The causes of the financial crisis
5 The financial crisis and market efficiency
6 The financial crisis and economic activity
adjustment amount announcement Anstalt assets Austrian banks Austrian currency Austrian government Austrian National Bank Austrian schilling balance sheet bank failures Bank of England bank’s banking crisis banking panic banking sector behavior bills capital causes central bank changes collapse conﬁdence countries Credit-Anstalt crisis crises currency crisis debt decline deﬁnition deposits discount domestic Economist events of 1931 exchange rate ﬁgures ﬁnance ﬁnancial crisis ﬁnancial institutions ﬁnancial markets ﬁnd ﬁrst ﬁscal ﬁxed foreign creditors foreign exchange foreign exchange market foreign reserves Germany gold guarantee high-powered money hyperinﬂation illiquid increased industry inﬂation inﬂuence insolvency interest rates interwar June Kernbauer Kindleberger last resort League of Nations lender of last liquidity loan LofN losses million schillings monetary monetary base money demand money stock percent portfolio potential problems proﬁts reﬂected reported role shares signiﬁcant speciﬁc stability Table Vienna Viennese banks Wiener Borsen-Kurier