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Free or central banking?: Liquidity and financial deepening in Sweden, 1834–1913
Stockholm School of Economics and Stern School of Business, New York University.
2006 (English)In: Explorations in economic history (Print), ISSN 0014-4983, E-ISSN 1090-2457, Vol. 43, no 1, 64-93 p.Article in journal (Refereed) Published
Abstract [en]

During Sweden’s nineteenth-century modernization, Enskilda banks contributed to economic expansion and integration by providing generally accepted means of payment beyond what would have been possible for the central bank, the Riksbank. The Riksbank was constrained by specie-convertibility requirements for Sweden’s currency. Contrary to previous arguments, however, the Enskilda banks did not operate according to free banking theory. The Enskilda banks held Riksbank notes instead of specie as base-money reserves. This arrangement led to a higher supply of formal liquidity than what would have been the case with either a free banking system or a pure deposit-based commercial banking system. The consequence for Sweden was a rapid rate of monetization and financial deepening.

Place, publisher, year, edition, pages
2006. Vol. 43, no 1, 64-93 p.
Keyword [en]
central banking, classical silver and gold standards, fractional reserves, free banking, liquidity, money supply
National Category
Economics and Business Economic History
Research subject
Economic History
URN: urn:nbn:se:uu:diva-172755DOI: 10.1016/j.eeh.2005.10.004ISI: 000234941700004OAI: oai:DiVA.org:uu-172755DiVA: diva2:515555
Available from: 2012-04-13 Created: 2012-04-13 Last updated: 2012-05-11Bibliographically approved

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Ögren, Anders
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