Abstract

On the eve of World War I the Austrian Credit Mobilier system stood at the zenith of its development. The collapse of the Habsburg Monarchy and the economic disintegration of Central Europe led to a drastic change of the environment within which the banks had to conduct their business. The large Viennese commercial banks, although weakened by war and inflation, decided to continue their traditional business policy which embraced the Danubian area as a whole. They were aided in this by two factors: the influx of short-term capital and the acquisition of equity capital by the west. The chronic industrial stagnation undermined the capital base especially of those banks which persisted in an expansionary business policy. A a result, the Boden-Credianstalt had to be merged with the Creditanstalt in 1929, and the latter foundered after the inception of the world depression and initiated the Central-European financial crisis