Macroeconomic Effects of Swiss Banking Crises,1930-2004

Abstract:

The response of the Swiss economy to banking crises from 1930-2004 is investigated using bank balance sheet and financial market data. GDP growth, the banking sector itself and credit conditions responded strongly to banking shocks, but the impact on GDP growth mitigated over the years. Since the end Bretton Woods the banking industry itself recovers much quicker than it used to do while credit conditions remain tight.