Studies on Swedish banking 1870-2001

Abstract: A novel set of long-term data on Swedish commercial banks in 1870–2001 is used to shed new light on some long-standing issues in money and banking. Essays 1 and 2 explore long-term changes in the leverage and profitability of the Swedish banking system, and inquire into the causes of their change. In particular, it is investigated whether inflation and high corporate taxes were the causes behind the increasing leverage of Swedish banks in the 20th century. Essays 3 to 5 describe the workings of the Swedish note-banking system in the late 19th century and compare its performance with the central-banking regime after 1904, when the Bank of Sweden gained a note monopoly. How does note monopolisation affect the elasticity of the currency, and how does it affect the size of money and credit cycles? These classical questions are tested empirically for the first time.