Pablo Martín-Aceña

Financial crises in Spain: lessons from the last 150 years

Financial crises are not unique to current financial systems. Are crises alike? Have they become more frequent, longer lasting and more severe since the 20 th century? What does history tell us? The objective of this paper is to study the financial crises that have occurred in Spain over the last 150 years. We consider different types of crises (banking, currency and stock market crises), together with all their possible combinations, estimate their frequency by period and measure their length and depth. The main conclusion we obtain is that Spanish crises have been more frequent than in the rest of the world and have been more severe and more complex since 1973, as the 2007 crisis is confirming.

Floating against the tide: Spanish monetary policy, 1870-1931

The gold standard began to emerge as a universal monetary system in the late 1870s, and it had spread throughout the world economy by 1900. It was unusual for nations to be off the gold standard, and it meant that they were detached from the international financial community. Spain never joined the gold standard club in any of its varieties, either before or after 1914. Unlike the vast majority of the European currencies, the peseta’s exchange rate fluctuated, sometimes widely, against gold and gold currencies. Gold convertibility was suspended in 1883 and never resumed. Nevertheless, the monetary authorities were aware that the Spanish economy, off the gold standard, was an outlier in the international economy and made plans to put the peseta on gold both before and after 1914.Why Spain never adopted the gold standard is a complex issue, and our paper offers a possible answer by examining the behaviour of an issuing bank that refused to accept, or resisted, its role as a central bank. Our study also provides a basis for a comparison between the Bank of Spain, some of its features and policies, with other peripheral issuing institutions. Moreover, our paper encompasses both the pre-war and the post-war periods, which allows us to present both the similarities and the differences in the exchange and monetary policies of the Spanish authorities during the era of the classical gold standard and the years of the gold exchange standard

The Spanish banking system from 1900 to 1975

The history of the modern Spanish banking system began in 1856 when the Cortes (parliament) passed the Issuing Banks Law and the Credit Companies Law. The first of these Laws enshrined the principle of plurality of issuance and, at the same time, renamed the Banco Espanol de San Fernando the Banco de Espana, the name it has retained to the present day. A significant number of establishments were founded under the aegis of the Issuing Banks Law. By 1866 the number of banks had thus risen from three (the Banco Espanol de San Fernando, the Banco de Barcelona and the Banco de Cadiz) to 21. The second of the two Laws, the Credit Companies Law, led to the creation of a series of institutions authorized to conduct a wide range of activities, from bill discounting and trade credit, through to long-term lending and investments in company shares and bonds. In Madrid, the Sociedad de Credito Mobiliario Espanol, the Sociedad Espanola Mercantil e Industrial and the Compania General de Credito, were founded, each with a portion of French capital. These were not the only banks to be created, as investment banks also sprang up in all of Spain’s regions. Businessmen were particularly active in Catalonia and Valencia, and it was there that three of the most significant establishments emerged: the Sociedad Catalana General de Credito, the Credito Barcelones and the Sociedad Valenciana de Fomento.