Sök

Working Paper No. 62. The Provision of Liquidity in the Swedish Note Banking System 1878–1901

PublikationWorking paper
Clearing mechanism, Ekonomisk historia, Företagandets villkor, Lagrestriktioner, Per Hortlund
Working Paper No. 62.
Ladda ner

Sammanfattning

The working of the ”asset currency” provided by the Swedish note banking system in 1878–1901 is described. Natural and institutional conditions caused the demand for currency to peak in March and September, with troughs in July and January. The paper investigates how the Enskilda banks provided liquidity to solve the problem. This is done by describing how the volume of notes varied over the year, and how other balance sheet items co-moved with them. Strong seasonal co-variation is found particularly between lend-ing and foreign payments media, varying like communicating vessels over the sailing season in May–October (when the sea was ice free and shipments were made).

Hortlund, P. (2005). The Provision of Liquidity in the Swedish Note Banking System 1878–1901. Ratio Working Paper No. 62.

Baserat på innehåll

Working Paper No. 67. Clearing vs. Leakage: Does Note Monopoly Increase Money and Credit Cycles?
Working paperPublikation
Hortlund, P.
Publiceringsår

2005

Publicerat i

Ratio Working Paper

Sammanfattning

The effects of note monopolisation on the amplitude of money and credit cycles are studied. Note monopolisation trades clearing for leakage. If the central bank’s reserve ratio is larger than that of the commercial banks, and if the currency-deposit ratio is sufficiently large, the leakage effect could domi-nate the loss-of-clearing effect (base expansion), such that the credit capacity of the banking system decreases. This was the case when the Bank of Sweden gained a note monopoly in 1904. Money and credit cycles should therefore have become smaller. Swedish bank data for 1871–1938 reveal that money cycles became smaller, but credit cycles larger. The latter is attributed to an increasing time-demand deposit ratio, which increases the credit capacity of the banking system.

Working Paper No. 67. Clearing vs. Leakage: Does Note Monopoly Increase Money and Credit Cycles?
Working paperPublikation
Hortlund, P.
Publiceringsår

2005

Publicerat i

Ratio Working Paper

Sammanfattning

The effects of note monopolisation on the amplitude of money and credit cycles are studied. Note monopolisation trades clearing for leakage. If the central bank’s reserve ratio is larger than that of the commercial banks, and if the currency-deposit ratio is sufficiently large, the leakage effect could domi-nate the loss-of-clearing effect (base expansion), such that the credit capacity of the banking system decreases. This was the case when the Bank of Sweden gained a note monopoly in 1904. Money and credit cycles should therefore have become smaller. Swedish bank data for 1871–1938 reveal that money cycles became smaller, but credit cycles larger. The latter is attributed to an increasing time-demand deposit ratio, which increases the credit capacity of the banking system.

Working Paper No. 63. The Long-Term Relationship between Capital and Earnings in Banking: Sweden 1870–2001
Working paperPublikation
Hortlund, P.
Publiceringsår

2005

Publicerat i

Ratio Working Paper

Sammanfattning

Contrary to received wisdom, two recent studies report a negative relationship between leverage and profitability in banking in the 1980s and early 1990s. This study presents new data on the leverage and profitability of Swedish commercial banks in 1870–2001, and explore the sign of the relation-ship in the long term. In the studied period, the capital-asset ratio decreased by a factor four, while return-on-equity more than doubled. The Leverage Formula postulates a positive linear relation between return-on-equity and the debt-equity ratio. A strong positive linear relationship was found over the period 1871–1980, but not in 1980–2001. Thus, while supporting the re-sults of the previous studies, a long-term “normal” positive relationship be-tween leverage and profitability is also reaffirmed.

Visa fler

Ratio är ett fristående forskningsinstitut som forskar om hur företagandets villkor kan utvecklas och förbättras.

Sveavägen 59 4trp

Box 3203

103 64 Stockholm

Postgiro: 382621-1

|

Bankgiro: 512-6578