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Money and Credit: Lessons of the Irish Bank Strike of 1970
Credit and Capital Markets – Kredit und Kapital, Vol. 51 (2018), Iss. 4 : pp. 645–667
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Prof. Dr. Malte Krueger, University of Applied Sciences Aschaffenburg, Faculty of Business and Law, Würzburger Str. 45, D-63743 Aschaffenburg, E-Mail: malte.krueger@h-ab.de
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Google Scholar -
Central Bank of Ireland (1971): Survey of Economic Effects of Bank Dispute 1970, Dublin.
Google Scholar -
Cockburn, P. (2015): We can all get by quite well without banks – Ireland managed to survive without them, The Independent (online), 11 July 2015 (https://www.independent.co.uk/voices/comment/we-can-all-get-by-quite-well-without-banks-ireland-managed-to-survive-without-them-10382975.html).
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Fama, E. F. (1980): Banking in the Theory of Finance, Journal of Monetary Economics, 6, pp. 39–57.
Google Scholar -
Fogarty, M. P. (1971): Report of Banks Inquiry: Report on Dispute of 1970 between the Associated Banks and the Irish Bank Officials’ Association and Recommendations as to what action might be taken to avoid the risk of closures through industrial action in the future.
Google Scholar -
Hawtrey, R. G. (1919): Currency and Credit, Longmans, Green and Co.: London.
Google Scholar -
Kelly, J. (2003): The Irish Pound: From Origins to EMU, Bank of Ireland Quarterly Bulletin, Spring 2003, pp. 89–115.
Google Scholar -
Kiyotaki, N./Wright, R. (1993): A Search-Theoretic Approach to Monetary Economics, The American Economic Review, Vol. 83(1), pp. 63–77.
Google Scholar -
Manning, M./Nier, E./Schanz, J. (2009): The Economics of Large-value Payments and Settlement: Theory and Policy Issues for Central Banks, Oxford: Oxford University Press.
Google Scholar -
Murphy, A. E. (1978): Money in an economy without banks: the case of Ireland, The Manchester School, pp. 41–50.
Google Scholar -
Norman, B./Zimmerman, P. (2016): The cheque republic: money in a modern economy with no banks, 20 January 2016 (http://bankunderground.co.uk/2016/01/20/the-cheque-republic-money-in-a-modern-economy-with-no-banks/).
Google Scholar -
The Economist (1970): Dublin’s rocky road, October 17, 1970, pp. 65–6.
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The Economist (1966): No banks on the Liffey, August 13, 1966, p. 671.
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Abstract
In Ireland, there was a bank strike that led to a complete shut-down of the main part of the banking system from May to November 1970. The effects of this strike were surprisingly limited. This had led some observers to conclude that trade credit can easily substitute for bank deposits as a means of payment. In this paper, it is shown how cash and cheques were used as substitutes and complements allowing for “business as usual” for an extended period of time. This paper argues that such a situation would not have prevailed much longer. The lack of a proper settlement mechanism implied that risks were rising for almost all transactors. In order to contain risks the use of trade credit would have declined and economic performance would have deteriorated progressively.
Table of Contents
| Section Title | Page | Action | Price |
|---|---|---|---|
| Malte Krueger: Money and Credit: Lessons of the Irish Bank Strike of 1970 | 1 |