Das Wechselkreditgeschäft der Reichsbank vor der Bankenkrise von 1931

Abstract

Abstract This article examines two aspects of the Reichsbank’s discount business in the years 1924 to 1932: First, the granting of Reichsbank discount loans to commercial banks in their function as lenders of last resort. Second, the direct granting of discount loans by the Reichsbank to non-banks to finance the short-term assets of industry and trade. From 1931 onwards, the Reichsbank increasingly granted financial discount loans to alleviate the liquidity crisis of the commercial banks. I trace this in detail for the Reichsbank branch in Leipzig. With regard to the granting of loans by the Reichsbank to trade and industry, I find indications of relatively high credit risks in the Reichsbank’s portfolio, especially in the granting of small loans. The extensive efforts in loan selection and loan monitoring documented here could not remedy the situation.