European Union

How failing banks paved Hitler's path to power

How did failing banks contribute to the rise of the Nazis? Image: REUTERS/Kai Pfaffenbach

Hans-Joachim Voth
UBS Professor of Macroeconomics and Financial Markets, Department of Economics, , Zurich University
José-Luis Peydró
ICREA Professor of Economics at UPF, Barcelona GSE; Research Professor and Research Associate, , CREI; and CEPR Research Fellow
Sebastian Doerr
PhD student in Economics, , University of Zurich
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 Note: The shaded area indicates the period of the 1931 banking crisis, from the beginning of troubles at Austrian Creditanstalt to the merger between Danatbank and Dresdner Bank. Blue vertical lines show: (A) beginning troubles at Austrian Creditanstalt (May 1931), (B) Nordwolle accounting irregularities discovered and Hoover Moratorium established (June 1931), (C) failure of Danatbank and ensuing bank holidays (July 1931), and (D) forced merger of Danatbank and Dresdner Bank.
Note: The shaded area indicates the period of the 1931 banking crisis, from the beginning of troubles at Austrian Creditanstalt to the merger between Danatbank and Dresdner Bank. Blue vertical lines show: (A) beginning troubles at Austrian Creditanstalt (May 1931), (B) Nordwolle accounting irregularities discovered and Hoover Moratorium established (June 1931), (C) failure of Danatbank and ensuing bank holidays (July 1931), and (D) forced merger of Danatbank and Dresdner Bank.
 Note: This map of Germany shows the geographical distribution of cities with either positive or zero Danat/Dresdner exposure. Blue dots indicate cities with DD exposure, grey diamonds those with no DD exposure.
Note: This map of Germany shows the geographical distribution of cities with either positive or zero Danat/Dresdner exposure. Blue dots indicate cities with DD exposure, grey diamonds those with no DD exposure.
 Note: Average change in firm wage bill from 1929 to 1933 for firms not connected to any of the four largest banks (Other connected), firms connected to Commerzbank and Deutsche Bank (Großbank connected), and firms connected to Danatbank and Dresdner Bank (DD connected)
Note: Average change in firm wage bill from 1929 to 1933 for firms not connected to any of the four largest banks (Other connected), firms connected to Commerzbank and Deutsche Bank (Großbank connected), and firms connected to Danatbank and Dresdner Bank (DD connected)
 Note: Panel A shows density of change in city incomes from 1928 to 1934 for cities in bottom, middle, and top tercile of exposure to Danatbank and Dresdner Bank borrowers. Panel B shows density of change in NSDAP vote shares from September 1930 to March 1933 elections.
Note: Panel A shows density of change in city incomes from 1928 to 1934 for cities in bottom, middle, and top tercile of exposure to Danatbank and Dresdner Bank borrowers. Panel B shows density of change in NSDAP vote shares from September 1930 to March 1933 elections.
 Note: From Der Stürmer. The caption reads “The Jewish banks and the German Businessman”.
Note: From Der Stürmer. The caption reads “The Jewish banks and the German Businessman”.
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European UnionGlobal RisksBanking and Capital Markets
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