'International Banking and Finance in Troubled Times: Reflections from the Past' workshop report (June 2022)
GloCoBank researcher Marco Molteni and associated graduate researcher Raphael Heim recently took part in a workshop on ‘International Banking and Finance in Troubled Times: Reflections from the Past’ jointly organised by the Leibniz Institute for Financial Research SAFE, Goethe University Frankfurt, and the Institute for Banking and Financial History, Frankfurt on 29-30 June 2022. The event was organised in the context of GloCoBank Principal Investigator Catherine Schenk‘s tenure as Goethe University Visiting Professorship of Financial History.
The workshop provided an opportunity to reflect on banking and financial conditions as the world emerges from the pandemic and enters a new geopolitical era in Europe, in particular how banking and banking and finance has coped with previous periods of crisis and recovery. Twelve early career researchers from across Europe, the UK and US gathered to present their research, with papers covering topics such as the 1871-1879 silver crisis, the 1918-1919 pandemic, World War II, Amsterdam and the Atlantic revolutions, and the Shanghai rubber stock market crisis – see programme.
Marco Molteni’s paper, co-authored with Sebastian Alvarez and Wilfried Kisling, focused on financial contagion and correspondent banking relations in the 1907 crisis. This research, which is still a work-in-progress, involves the building of two new datasets. The first of these datasets reconstructs the network of international foreign branches and correspondents in 1901-1913. The second dataset records the balance sheets of the main international banks in 1901-1913. The two datasets show that correspondent banking was a key factor during the first (financial) globalisation and played a crucial role in the aftermath of the 1907 crisis. Preliminary results suggest that banks that had closer links with London, the leading financial centre of the time, suffered a more severe lending contraction in 1907-08. By contrast, there is evidence that having non-British correspondents could have mitigated this adverse effect. The authors are currently working to confirm these first results and delve into the exact mechanisms.
Oxford doctoral student Raphael Heim’s paper examined technological revolution for financial information markets in times of international crisis. For further details of Raphael's doctoral research project, see his profile page.
The event also included a public lecture by Catherine Schenk entitled ‘Designing the Global Payments System: Telegraph to Tether’ which outlined developments, changing technical requirements and current challenges of international payments – watch video and read report here.