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- Title
VINCULACIONES POLÍTICAS EN UN RÉGIMEN DE BANCA LIBRE: EL CASO DE LA CRISIS BANCARIA DE 1878 EN CHILE.
- Authors
Briones, Ignacio
- Abstract
In 1878 Chile experienced a banking crisis which brought an end to the Chilean free-banking period based on convertibility initiated in 1860. Using monthly bank balance sheets and other primary sources, I analyze the period and argue that one important explanation for the crisis was the growing relationship between banks and government through state loans to finance fiscal deficits and privileges to the issuing banks. I claim that the crisis emerged from a large bank loan in late 1877 which induced over-issuance and depreciation expectations leading, logically, to a bank run. The Chilean case provides valuable evidence of an element frequently neglected by the free-banking literature: the links between banks and government.
- Subjects
LATIN America; FINANCIAL crises; ECONOMIC conditions in Chile; BANK loans; DEPRECIATION; BANKING policy; FREE banking; NINETEENTH century; HISTORY
- Publication
Revista de Historia Económica / Journal of Iberian & Latin American Economic History, 2016, Vol 34, Issue 3, p479
- ISSN
0212-6109
- Publication type
Article
- DOI
10.1017/S0212610916000057