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50-512: The Crédit Mobilier had a major role in the financing of numerous railroads and other infrastructure projects by mobilizing the savings of middle class French investors as capital for vast lending schemes. Its operations resulted in vast debts for the countries which accepted its infrastructure loans, and the bank was thus indirectly involved in European encroachment on countries whose governments subsequently defaulted on these loans, not least during

100-464: A recession in 1990–91 (also fueled by the oil price crisis ), whose effects lasted as late as 1994. This downturn is more remembered for its political effects: British Prime Minister Margaret Thatcher had to resign in November 1990; and while his approval ratings were above 60%, U.S. President George H. W. Bush lost the 1992 election to Bill Clinton because of the domestic malady marked by

150-509: A coincidence of multiple sudden external shocks, including loss of Soviet trade, the savings and loan crisis and early 1990s recession in the West, with the internal overheating that had been brewing throughout the 1980s. Liberalization had resulted in the so-called "casino economy". Persistent structural and monetary policy problems had not been solved, leaving the economy vulnerable to even mild external shocks. The depression had lasting effects:

200-688: A depression that do not normally occur during a recession. In the United States the National Bureau of Economic Research determines contractions and expansions in the business cycle, but does not declare depressions. Generally, periods labeled depressions are marked by a substantial and sustained shortfall of the ability to purchase goods relative to the amount that could be produced using current resources and technology ( potential output ). Another proposed definition of depression includes two general rules: There are also differences in

250-638: A depression. The only two eras commonly referred to at the current time as "depressions" are the 1870s and 1930s. To some degree, this is simply a stylistic change, similar to the decline in the use of "panic" to refer to financial crises, but it does also reflect that the economic cycle – both in the United States and in most OECD countries – though not in all – has been more moderate since 1945. There have been many periods of prolonged economic underperformance in particular countries/regions since 1945, detailed below, but terming these as "depressions"

300-533: A global nosedive in commodities that ruined many developing nations, while servicemen returning from the trenches found themselves with high unemployment as businesses failed, unable to transition into a peacetime economy. Also, the Spanish flu pandemic of 1918–20 brought economic activity to a standstill as even more people became incapacitated. Most developed countries had mostly recovered by 1921–22, however Germany saw its economy crippled until 1923–24 because of

350-478: A recession and a depression will have different ending dates and thus distinct durations. Under this definition, the length of depression will always be longer than that of the recession starting the same date. A useful example is a difference in the chronology of the Great Depression in the U.S. under the view of alternative definitions. Using the second definition of depression, most economists refer to

400-422: A recession, since the difference between a depression and a recession is the severity of the fall in economic activity. In other words, each depression is always a recession, sharing the same starting and ending dates and having the same duration. Under the second definition, depressions and recessions will always be distinct events however, having the same starting dates. This definition of depression implies that

450-770: A very extensive scale. A joint-stock company operating on a principle of limited liability , its initial investments came from large industrialists, but its capital was vastly increased by accepting investments from the general public. In 1854, it subscribed largely to the war loan of the French government, raised during the Crimean War , to the Grand Central Railway Company, to the General Omnibus Company of Paris, and to various other important projects. The dividend declared for 1854

500-488: Is controversial. The 2008–2009 economic cycle, which has comprised the most significant global crisis since the Great Depression, has at times been termed a depression, but this terminology is not widely used, with the episode instead being referred to by other terms, such as the " Great Recession ". The largest depression of all time occurred during the General Crisis . The Ming Empire of China went bankrupt and

550-530: Is now the seat of the Fédération française des sociétés d'assurances  [ fr ] . The CMF was acquired in 1922 by the Banque de l'Union Parisienne . Economic depression An economic depression is a period of carried long-term economic downturn that is the result of lowered economic activity in one or more major national economies. It is often understood in economics that economic crisis and

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600-401: Is widely credited with having 'popularized' the term/phrase, informally referring to the downturn as a "depression", with such uses as "Economic depression cannot be cured by legislative action or executive pronouncement", (December 1930, Message to Congress) and "I need not recount to you that the world is passing through a great depression" (1931). Due to the lack of an agreed definition and

650-542: The Banque de France . The Crédit Mobilier never recovered its former importance. Established in 1852, the French Government sanctioned the statutes of the new bank with the name of the Société Générale du Crédit Mobilier, with a capital of 60,000,000 francs. It was permitted to issue obligations up to ten times its assets – 600 million francs of debt for 60 million francs of equity. It was founded by

700-728: The Crédit Mobilier Français and Société générale de Belgique , with the aim to support French ventures in the post-Ottoman Eastern Mediterranean region, even though in practice it only developed its activity in Turkey . In Istanbul , the BFPO took over the former branch building of the Wiener Bankverein , erected a decade earlier on a prominent location at the northern entrance of the Golden Horn . Following

750-702: The Hentsch & Lütscher, Goldschmidt , and Königswarter family banks. The BFE’s head office was in a building at 3-5, rue Saint-Georges in Paris, designed in 1869 by architect Hector Degeorge  [ fr ] , which was demolished in the early 20th century. In 1888, the BFE led the financing of the Eiffel Tower promoted by Gustave Eiffel , together with the Crédit Industriel et Commercial and

800-534: The Pereire brothers with a view to countering James Mayer Rothschild 's alliance with the industrialist Paulin Talabot regarding competition for the railway expansion. It was allowed to acquire shares of public companies, and to pay calls made upon it in respect of such shares by its own notes or obligations; also to sell or give in security all shares thus acquired. The operations of the society were conducted upon

850-669: The Société Générale . On 14 May 1889, as the BFE's activity in Egypt had decreased to the point that its name no longer made sense, the Bischoffheim family fostered a restructuring in which the BFE ceased activity and brought its residual capital to the newly formed Banque internationale de Paris  [ fr ] (BIP, “International Bank of Paris”). The BIP took over the BFE’s former operations and head office. In addition to

900-547: The Stuart Monarchy fought a civil war on three fronts in Ireland, Scotland, and England . Thomas Hobbes , an English philosopher, created the first recorded explanation of the need for a universal Social Contract in his 1651 book Leviathan based on the general misery within society during this period. This depression is acknowledged to be a worse depression in the United States than the later Great Depression of

950-779: The 1930s. This depression ended in the United States due to the California Gold Rush and its tenfold addition to the United States' gold reserves. As with most depressions, it was followed by a thirty-year period of a booming economy in the United States, which is now called the Second Industrial Revolution (of the 1850s). The Panic of 1837 was an American financial crisis , built on a speculative real estate market. The bubble burst on 10 May 1837 in New York City , when every bank stopped payment in gold and silver coinage . The Panic

1000-401: The 19th and early 20th centuries, financial crises were traditionally referred to as "panics", e.g., the 'major' Panic of 1907 , and the 'minor' Panic of 1910–1911 , though the 1929 crisis was more commonly called "The Crash", and the term "panic" has since fallen out of use. At the time of the Great Depression (of the 1930s), the phrase "The Great Depression" had already been used to refer to

1050-676: The BFCI's chairmanship, and kept it when he succeeded Joseph Caillaux as finance minister in 1902. Ernest May  [ fr ] was the bank's general manager. The BFCI developed an investment banking business based on the prior ventures of its two predecessor entities, and also expanded into Brazil and the Ottoman Empire. In 1921, the BFCI sponsored the creation of the Banque Française des Pays d'Orient (BFPO, "French Bank of Eastern Lands"), with other participants including

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1100-578: The Crédit Mobilier from the Pereire family and merged it with the Office des Rentiers, adopting the name Crédit mobilier français (CMF) for the merged entity. The CMF was initially headquartered at 3–5, rue Saint-Georges in the former seat of the Banque internationale de Paris  [ fr ] , and moved in 1912 to a larger building at 30-32, rue Taitbout and 26, boulevard Haussmann, which

1150-463: The Finnish markka was floated and was eventually replaced by the euro in 1999, ending decades of government control of the economy, but also high, persistent unemployment. Employment has never returned even close to the pre-crisis level. The late 1910s and early 1920s were marked by an economic depression that unraveled in particularly catastrophic circumstances: World War I and its aftermath led to

1200-589: The Great Depression, as the period between 1929 and 1941. On the other hand, using the first definition, the depression that started in August 1929 lasted until March 1933. Note that NBER, which publishes the recession (instead of depression) dates for the U.S. economy, has identified two recessions during that period. The first between August 1929 and March 1933 and the second starting in May 1937 and ending in June 1938. Today

1250-549: The Imperial Ottoman Bank and the Austrian Mortgage Bank, as well as insurance companies and building contractors. The bank had large investments in transatlantic steamship lines, urban gas lighting , a newspaper and the Paris public transit system. In 1866–1867, the bank underwent a severe crisis and the Pereire brothers were forced to resign at the demand of their longtime adversaries in

1300-652: The Soviet planned economy and the transition to a market economy resulted in catastrophic declines in GDP of about 45% from 1990 to 1996 and poverty in the region had increased more than tenfold. Finnish economists refer to the Finnish economic decline during and after the breakup of the Soviet Union (1989–1994) as a great depression ( suuri lama ). However, the depression was multicausal, with its severity compounded by

1350-458: The United States in the 1930s. Average standards of living registered a catastrophic fall in the early 1990s in many parts of the former Eastern Bloc , most notably in post-Soviet states . Even before Russia's financial crisis of 1998 , Russia 's GDP was half of what it had been in the early 1990s. Some populations are still poorer today than they were in 1989 (e.g. Ukraine , Moldova , Serbia , Central Asia , Caucasus ). The collapse of

1400-460: The crisis, and the poor performance of its economy after the introduction of severe austerity measures slowed the entire eurozone's recovery. Greece's troubles led to discussions about its departure from the eurozone . The economic crisis in the 1990s that struck former members of the Soviet Union was almost twice as intense as the Great Depression in the countries of Western Europe and

1450-541: The depression and increasing urban decay . In 2005, the persistent oil price rises and economic overheating caused by deregulation led to a gradual deterioration of the world economy with inflation and unemployment rising as growth slowed: The housing bubble in the U.S. burst in 2007, and the American economy slipped into a recession . This, in turn, provoked the failure of many prominent financial institutions throughout 2008, most notably Lehman Brothers , leading to

1500-439: The duration of depression across definitions. Some economists refer only to the period when economic activity is declining. The more common use, however, also encompasses the time until the economic activity has returned close to normal levels. A recession is briefly defined as a period of declining economic activity spread across the economy (according to NBER). Under the first definition, each depression will always coincide with

1550-470: The early-to-mid 2010s. This definition also includes the economic performance of New Zealand from 1974 to 1992 and Switzerland from 1973 to the present, although this designation for Switzerland has been controversial. From 1980 to 2000, Sub-Saharan Africa broadly suffered a fall in absolute income levels. Banque internationale de Paris The Banque Française pour le Commerce et l'Industrie ( BFCI , "French Bank for Trade and Industry")

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1600-965: The following recession that may be named economic depression are part of economic cycles where the slowdown of the economy follows the economic growth and vice versa. It is a result of more severe economic problems or a downturn than the recession itself, which is a slowdown in economic activity over the course of the normal business cycle of growing economy. Economic depressions may also be characterized by their length or duration, showing increases in unemployment , larger increases in unemployment or even abnormally large levels of unemployment (as with for example some problems in Japan in incorporating digital economy, that such technological difficult resulting in very large unemployment rates or lack of good social balance in employment among population, lesser revenues for businesses, or other economic difficulties, with having signs of financial crisis , that may also reflect on

1650-605: The former shareholders of the BFE, the BIP’s founding shareholders included British banker Ernest Cassel as well as the Banque de Paris et des Pays-Bas . The BFE was eventually liquidated in 1892 as the BIP took over all its remaining assets and liabilities. During its brief existence, the BIP was mainly involved in the then-booming business of Russian bonds and their subscription by French savers. The Banque française d'Afrique du Sud  [ fr ] (BFAS, “French Bank of South Africa”)

1700-437: The hyperinflation crisis . The 1973 oil crisis , coupled with the rising costs of maintenance of welfare state in most countries led to a recession between 1973 and 1975 , followed by a period of almost minimal growth and rising inflation and unemployment . The 1980–82 recession marked the end of the period. The savings & loans and the leveraged buyout crises led to a severe depression in mid-to-late 1989, causing

1750-470: The loss of millions of jobs. Several Latin American countries had severe downturns in the 1980s: by the Kehoe and Prescott definition of a great depression as at least one year with output 20% below trend, Argentina , Brazil , Chile , Mexico , and Peru experienced great depressions in the 1980s, and Argentina experienced another between 1998 and 2002. South American countries fell once again into this in

1800-517: The merger of the BIP and BFAS to form the BFCI, which was consequently nicknamed the " banque de Rouvier " or " banque Rouvier ". Two thirds of the shares went to the former owners of the BFAS and BIP, both of which were subsequently liquidated; other participants included the Comptoir national d'escompte de Paris , the Société Générale , and the Banque de Paris et des Pays-Bas . Rouvier assumed

1850-594: The period 1873–96 (in the United Kingdom), or more narrowly 1873–79 (in the United States), which has since been renamed the Long Depression . Common use of the phrase "The Great Depression" for the 1930s crisis is most frequently attributed to British economist Lionel Robbins , whose 1934 book The Great Depression is credited with 'formalizing' the phrase, though US president Herbert Hoover

1900-404: The strong negative associations, the characterization of any period as a "depression" is contentious. The term was frequently used for regional crises from the early 19th century until the 1930s, and for the more widespread crises of the 1870s and 1930s, but economic crises since 1945 have generally been referred to as "recessions", with the 1970s global crisis referred to as " stagflation ", but not

1950-680: The term "depression" is most often associated with the Great Depression of the 1930s, but the term had been in use long before then. Indeed, an early major American economic crisis, the Panic of 1819 , was described by then-president James Monroe as "a depression", and the economic crisis immediately preceding the 1930s depression, the Depression of 1920–21 , was referred to as a "depression" by president Calvin Coolidge . However, in

2000-1098: The work of banks, or may result in banking crisis (in various ways that may be for example unauthorized transformations of banks), and further the crisis in investment and credit; that further could reflect on innovation and new businesses investments lessening or even shrinking, or buyers dry up in recession and suppliers cut back on production and investment in technology, in financial crisis that may be more country defaults or debt problems, and further in feared businesses bankruptcies , and overall business slowdown. Other bad signs of economic depression could be significantly reduced amounts of trade and commerce (especially international trade ), as well as in currency markets that maybe fluctuations or unexpected exchange rates with observed highly volatile currency value fluctuations (often due to relative currency devaluations ). Other signs of depression are prices deflation , financial crises , stock market crash or even bank failures , or even specific behaviour of economic agents or population, that are also common or also non common elements of

2050-577: The worldwide economic depression of the 1870s. It became a powerful and dynamic funding agent for major projects in France, Europe, North Africa and the world at large. As Napoleon III redeveloped Paris, the Crédit Mobilier speculated on real estate with inside information and collaborated with Baron Haussmann to develop neighborhoods such as rue de Rivoli, Opéra, and place de l'Etoile. Beyond France, it specialized in mining and railway development, for which it also funded or sponsored other banks including

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2100-445: Was 12%. In 1855, it lent two sums to the government—the one of 250,000,000 and the other of 375,000,000 francs. Its operations were vast during this year, and the net dividend declared amounted to 40%. The directors then proposed to avail themselves of their privilege of issuing their own obligations, and thought to issue two kinds of notes – the one at short dates, the other at long dates, and redeemable by installments. The proposed issue

2150-643: Was a significant bank in France, formed in 1901 from two predecessor entities, the Banque Franco-Égyptienne (est. 1870, restructured as Banque Internationale de Paris in 1889) and the Banque Française d'Afrique du Sud ( BFAS , est. 1895). It was purchased in 1922 by the Banque Nationale de Crédit , a predecessor entity of BNP Paribas . The Banque franco-égyptienne  [ fr ] (BFE, “French-Egyptian Bank”)

2200-646: Was created in 1870 on the initiative of financier Louis-Raphaël Bischoffsheim in the context of financial stress of the Khedivate of Egypt , which had close relations with France at the time. Khedive Isma'il Pasha contributed half of the initial capital. In the late 1870s, Egypt’s growing financial distress led the bank to seek additional capital from other sources including the Paris-based Crédit Industriel et Commercial , Ukraine-born banker Jacques de Gunzbourg  [ fr ] , and

2250-656: Was created in January 1895 by Jacques de Gunzbourg  [ fr ] , with the aim to channel French savings into investments in South African gold mines. the BFAS also was an early shareholder of the Compagnie générale d'électricité , also founded in 1895. Its head office was at 9, rue Boudreau in Paris, in a newly constructed block near the Palais Garnier . In June-July 1901, Maurice Rouvier fostered

2300-480: Was followed by a five-year depression, with the failure of banks and record high unemployment levels. Starting with the adoption of the gold standard in Britain and the United States, the Long Depression (1873–1896) was indeed longer than what is now referred to as the Great Depression, but shallower in some sectors. Many who lived through it regarded it to have been worse than the 1930s depression at times. It

2350-582: Was known as "the Great Depression" until the 1930s. The Great Depression of the 1930s affected most national economies in the world. This depression is generally considered to have begun with the Wall Street Crash of 1929 , and the crisis quickly spread to other national economies. Between 1929 and 1933, the gross national product of the United States decreased by 33% while the rate of unemployment increased to 25% (with industrial unemployment alone rising to approximately 35% – U.S. employment

2400-461: Was reorganized with a new board of management. In 1877, its assets were 77,000,000 francs, but its shares, the par value of which was 500 francs, sold for 200 francs only. During 1878–79, the capital was first reduced to 32,000,000 francs, and then increased to 40,000,000. In 1884, it was for a second time reduced to 30,000,000 francs, but the company never regained its losses. In 1902, a group of investors led by Jacques de Lapisse acquired control of

2450-478: Was still over 25% agricultural). A long-term effect of the Great Depression was the departure of every major currency from the gold standard , although the initial impetus for this was World War II (see Bretton Woods Accord ). Beginning in 2009, Greece sank into a recession that, after two years, became a depression . The country saw an almost 20% drop in economic output, and unemployment soared to near 25%. Greece's high amounts of sovereign debt precipitated

2500-476: Was to amount to 240,000,000 francs, but the public became alarmed at the prospect of so vast an issue of paper money, and in March 1856, the French government deemed it necessary to prohibit the proposed scheme. The prohibition was a severe blow to the institution. In 1856, its dividends did not exceed 22%; in 1857, they were only 5%. Several attempts to resuscitate its credit failed, and finally, in November 1871, it

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