Public borrowing in harsh times : the League of Nations Loans revisited

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dc.contributor.author Decorzant, Yann
dc.contributor.author Flores, Juan-Huitzi
dc.contributor.editor Universidad Carlos III de Madrid. Departamento de Historia Económica e Instituciones
dc.date.accessioned 2012-10-08T12:13:09Z
dc.date.available 2012-10-08T12:13:09Z
dc.date.issued 2012-09
dc.identifier.uri http://hdl.handle.net/10016/15594
dc.description.abstract This paper reassesses the importance of the League of Nations loans of the 1920s. These long-term loans were an essential part of the League’s strategy to restore the productive basis of countries in Central and Eastern Europe. Whereas the literature is not conclusive as to the final result of this experience, we argue that the League Loans were successful because they accomplished the task for which they were conceived—namely, to allow countries in financial distress to access capital markets. This success rested on the sustained efforts of the League of Nations to gather support from creditor countries’ governments and financial intermediaries, as well as its efforts to develop plans for economic reform for borrowing countries. We provide quantitative and qualitative evidence to show that the League provided market access in a difficult and hostile environment, and did so by building its own reputation as an actor that provided a credible commitment to economic and institutional reforms. Through the success of the placement of the initial issues, the League became capable of influencing borrowing costs, even if they continued to be predominately determined by the secondary market and remained high as a result of the risk involved. Much of the confusion in the literature is explained by the fact that the League lacked its own capital, which impeded its ability to act as a lender of last resort once the great depression hit Europe.
dc.format.mimetype application/pdf
dc.language.iso eng
dc.relation.ispartofseries Working papers in economic history
dc.relation.ispartofseries 12-07
dc.rights Atribución-NoComercial-SinDerivadas 3.0 España
dc.rights.uri http://creativecommons.org/licenses/by-nc-nd/3.0/es/
dc.subject.other League Loans
dc.subject.other Great Depression
dc.subject.other Capital markets
dc.subject.other Underwriting
dc.title Public borrowing in harsh times : the League of Nations Loans revisited
dc.type workingPaper
dc.subject.jel N20
dc.subject.jel N24
dc.subject.jel G01
dc.subject.jel G15
dc.subject.eciencia Economía
dc.subject.eciencia Historia
dc.rights.accessRights openAccess
dc.type.version submitedVersion
dc.identifier.uxxi DT/0000000980
dc.identifier.repec wp12-07
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