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Azorean savings banks and the 1929 economic crisis

Lopes, F. and Sequeira Dias, F. (2010): Azorean savings banks and the 1929 economic crisis.

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What sets the Azorean banking system apart in the Portuguese context is the concentration of Caixas Económicas or Savings Banks accounting for half of these financial institutions in Portugal.These saving banks were promoted and had as shareholders mainly small and medium local traders and landlords with export businesses. These small institutions were the only bank network covering most of the islands and preceded the expansion of a national network of agencies created mostly after the Second World War. This paper examines the effects of the 1929 crisis on the Azorean banking system which was generalized, and had deep and lon lasting effects, using unpublished data from the archive of Banco de Portugal. It is a case of contagion, typical of a banking crisis, affecting the credibility and confidence of all institutions and leadind to an interruption of payments for a period of two years. Bankruptcies are limited to Caixa Bancária Raposo de Amaral and Caixa económica Socorros Mútuos but the reestructuring spreads over a ten yera period.The contraction of monetary circulation caused by the banking crisis and the monetary integration are also major factors contributing to the long and deep economic crisis tham spread from 1929 to 1945.

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