Bernese banking crisis of 1720
The city and republic of Bern invested their money as early as the 17th century, and abroad in the 18th century. A speculative bubble with securities on the Paris ( Mississippi bubble ) and London ( South Seas bubble ) stock exchanges had far-reaching international consequences around 1720. The Bernese banking houses responsible for investing state funds collapsed. Together with the tulip crisis of 1637 , these are two early speculative crises in modern European times.
In the early modern period some Swiss estates of the old Confederation had financial surpluses. In the second half of the 17th century, the Bernese city-state began to professionally manage its surpluses. From 1710, the Malacrida & Cie. together with the bank Samuel Müller & Cie. mandated in London to invest funds abroad. Due to the national debt, France gradually began to replace the precious metal currency with paper money, London took over the idea and the result was a bull market that was unimaginable for the time . The Bernese representatives speculated and initially made huge profits. In mid-July 1720 the bubble burst (called the South Sea Bubble because of the company affected ) and the securities lost their value. Between November 1720 and June 1721 the two Bern institutes became insolvent and had to be liquidated. Many Bernese patricians took part in the profit-making speculations and lost money. A crisis broke out in Bern due to the bankruptcy of the two banks. In the absence of cross-border bankruptcy proceedings, the liquidation dragged on for about eleven years.
literature
- Nikolaus Linder: The Bernese banking crisis of 1720 and the law. A study on the legal, banking and financial history of Old Switzerland. Zurich: Schulthess Legal Media, 2004. ISBN 978-3-7255-4641-1