Hostname: page-component-586b7cd67f-dsjbd Total loading time: 0 Render date: 2024-11-22T18:58:34.192Z Has data issue: false hasContentIssue false
  • English
  • Français

Malmö diskont 1817: an institutional analysis of a banking crisis

Published online by Cambridge University Press:  24 June 2013

Tom Kärrlander
Tom Kärrlander*
Affiliation:
KTH Royal Institute of Technology
Get access Rights & Permissions [Opens in a new window]

Abstract

Malmö diskont, a Swedish bank, was forced to close in 1817 after 14 years of operation because of a bank run. At the time, it was one of only three private commercial banks in Sweden. Eventually, all three banks succumbed to bank runs. The purpose of this article is to study the 1817 banking crisis from a new perspective by attempting to answer the following research question: why did Malmö diskont go under? Institutional theory is used here as a research tool. The assumption is that institutions set the limits for individuals' actions and sometimes direct them towards particular actions. The conclusions are derived from analysing the institutional framework at the time and how it interacted with Malmö diskont. The crisis evolved in two stages. The first stage occurred when the financial position of Malmö diskont severely deteriorated in the interaction between institutions and actors in 1817. The implementation of a bailout and a new institutional structure would have been necessary to save the bank. This conclusion complements earlier theories related to monetary or credit overexpansion as to why banking crises occur. The second stage occurred when the Swedish government allowed Malmö diskont to fall in October 1817.

Keywords

banking crisisdiskont banksSwedish bankinginstitutional theory

JEL classification

N23: Europe: Pre-1913
Type
Articles
Information
Financial History Review , Volume 20 , Issue 2 , August 2013 , pp. 163 - 182
Copyright
Copyright © European Association for Banking and Financial History e.V. 2013 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Andersson, B. (1985). Malmö Diskont 1803–1818, verksamhet och erfarenheter. Gothenburg: Ekonomisk-historiska institutionen, Göteborgs universitet.Google Scholar
Andreen, P. G. (1958). Politik och finansväsen: Från 1815 års riksdag till 1830 års realisationsbeslut, del I: 1815–1818. Stockholm: Almqvist & Wicksell.Google Scholar
Bagehot, W. (1999). Lombard Street: A Description of the Money Market, vol. 14: Wiley Investment Classics. New York: John Wiley & Sons. (Original work published 1873)Google Scholar
Bordo, M. D. (1998). Commentary for the financial crisis of 1825 and the restructuring of the British financial system. Federal Reserve Bank of St Louis Review, 80(3), pp. 77–82.Google Scholar
Brisman, S. (1908). Realisationsfrågan 1808–34. PhD thesis, University of Gothenburg.Google Scholar
Brisman, S. (1924). Sveriges affärsbanker: Grundläggningstiden. Stockholm: Svenska Bankföreningen.Google Scholar
Checkland, S. G. (1975). Scottish Banking: A History 1695–1973. Glasgow: Collins.Google Scholar
Commons, J. R. (1957). Legal Foundations for Capitalism. Madison: University of Wisconsin Press. (Original work published 1924)Google Scholar
Falkman, L. B. (1986). Minnen från Malmö under första hälften af innevarande århundrade upptecknade af Ludvig B. Falkman. Malmö: Malmö Fornminnesförening. (Original work published 1891)Google Scholar
Fritz, S. (1967). Studier i svenskt bankväsen 1772–1789. Stockholm: Ekonomisk-Historiska Institutet.Google Scholar
Gårdlund, T. (1947). Svensk industrifinansiering under genombrottsskedet 1830–1913. Stockholm: Svenska Bankföreningen.Google Scholar
Halling, C. C. (1878–80). Minnen av CC Halling, from Martin Weibull's Samlingar utgivna för De skånska landskapens historiska och arkeologiska förening, vol. VII (1878), vol. VIII (1879), vol. IX (1880).Google Scholar
Hamilton, H. (1956). The failure of the Ayr Bank, 1772. Economic History Review, 8(3), pp. 405–17.CrossRefGoogle Scholar
Historisk statistik för Sverige [Historical Statistics of Sweden] (1959). Stockholm: Statistiska Centralbyrån.Google Scholar
Hodgson, G. M. (1988). Economics and Institutions: A Manifesto for a Modern Institutional Economics. Cambridge: Polity Press.CrossRefGoogle Scholar
Hume, D. (1953). Political Essays. Indianapolis, IN: Bobbs-Merrill. (Original work published in 1752)Google Scholar
James, J. A. (2012). Panics, payments disruptions and the Bank of England before 1826. Financial History Review, 19(3), pp. 289–309.CrossRefGoogle Scholar
Kindleberger, C. P. (2000). Manias, Panics and Crashes: A History of Financial Crises. New York: Wiley.CrossRefGoogle Scholar
Kindleberger, C. P. (2006). A Financial History of Western Europe. London and New York: Routledge. (Original work published in 1984)Google Scholar
Larsson, M. and Lindgren, H. (1992). Retail banking and corporate finance in Sweden. In Cassis, Y. (ed.), Finance and Financiers in European History, 1880–1960. Cambridge: Cambridge University Press.Google Scholar
Lindgren, H. (2002). The modernization of Swedish credit markets, 1840–1905: evidence from probate records. Journal of Economic History, 62(3), pp. 810–32.CrossRefGoogle Scholar
Lundh, H. (1930). Göta Kanals byggnadshistoria. Baltzar von Platen, kanalbolaget och statsmakterna. In Bring, S. E. (ed.), (1922–30) Göta Kanals historia. Uppsala: Göta kanalverk.Google Scholar
Neal, L. (1998). The financial crisis of 1825 and the restructuring of the British financial system. Federal Reserve Bank of St Louis Review, 80(3), pp. 53–76.Google Scholar
Nilsson, G. B. (1988). Kreditens jättekraft. Svenskt bankväsende i brytningstid och genombrottstid vid 1800-talets mitt (Uppsala Papers in Economic History, Research Report no. 18). Uppsala: Department of Economic History, Uppsala University.Google Scholar
North, D. C. (1990). Institutions, Institutional Change and Economic Performance. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
North, D. C. (1993). Economic Performance Through Time. Prize lecture in memory of Alfred Nobel, 9 December 1993 www.nobelprize.org/nobel_prizes/economics/laureates/1993/north-lecture.htmlGoogle Scholar
ögren, A. (2003). Empirical studies in money, credit and banking: the Swedish credit market in transition under the silver and gold standards 1834–1913. Doctoral thesis, Institute for Research in Economic History (EHF), Stockholm School of Economics.Google Scholar
Rait, R. S. (1930). The History of the Union Bank of Scotland. Glasgow: John Smith & Son.Google Scholar
Reinhart, C. M. and Rogoff, K. S. (2009). This Time Is Different: Eight Centuries of Financial Folly. Princeton and Oxford: Princeton University Press.Google Scholar
Rexius, G. (1917). Studier rörande striden om finansmakten under Karl XIV Johan. Uppsala: K. Humanistiska Vetenskaps-Samfundet.Google Scholar
Samuelsson, K. (1951). De stora köpmanshusen i Stockholm 1730–1815. Stockholm: Ekonomisk-Historiska Institutet.Google Scholar
Scott, R. W. (1995). Institutions and Organizations. Thousand Oaks: Sage.Google Scholar
Sjögren, H. and Knutsen, S. (2010). Why do banking crises occur? An evolutionary model of Swedish banking crises. In Ögren, A. (ed.), The Swedish Financial Revolution. Basingstoke: Palgrave Macmillan.Google Scholar
Sjöstrand, S. E. (1995). Towards a theory of institutional change. In Groenewegen, J., Pitelis, C. and Sjöstrand, S. E. (eds.), On Economic Institutions, Theory and Applications. Aldershot: Edward Elgar.Google Scholar
Sjövall, B. (1940). Malmö diskontverks fall 1817, Malmö fornminnesförenings årsskrift. Malmö: Malmö forminnesförening.Google Scholar
Skogman, C. D. (1846). Anteckningar om Riksens Ständers Bank och allmänna lånerörelsen i Sverge, Förra delen, (1845) och Sednare delen 1 (1846); ifrån och med år 1809 till och med år 1833.Google Scholar
Sommarin, E. (1927). Bankinspektionen i Sverige [The bank inspectorate in Sweden]. Presentation to the Norwegian Economics Association, 12 December 1927. Nationaløkonomisk Tidskrift 66.Google Scholar
Sveriges Riksbank 1668–1924 (1931). Part V. Stockholm.Google Scholar
Sylla, R., Wright, R. E. and Cowen, D. J. (2009). Alexander Hamilton, central banker: crisis management during the US financial panic of 1792. Business History Review 83, pp. 61–86.CrossRefGoogle Scholar
Thornton, H. (2010). An Enquiry Into the Effects of the Paper Credit of Great Britain. Whitefish, MT: Kessinger Publishing's Legacy Reprints. (Original work published in 1802)Google Scholar
Wood, G. (2000). The lender of last resort reconsidered. Journal of Financial Services Research, 18 (2/3), pp. 203–27.CrossRefGoogle Scholar