Conclusion

Abstract

The evidence presented concludes that the Minsky-Kindleberger narrative does not apply to the period before the crisis. There was no bubble. The cause of the crisis can be found in business and funding practices that created avenues of financial contagion. Once the initial shock hit, distress spread rapidly and wide throughout the financial system, especially damaging the bills of exchange network that was crucial for the operation of money markets. This makes this a ‘real’ crisis as per the Anna Schwartz definition. The intervention of a LOLR-like BOE was decisive. The variety and sophistication of containment efforts at such an early date make this crisis especially important in the history of banking practice.