The decentralized central bank: bank rate autonomy and capital market integration in Norway, 1850-1892

摘要

Before 1893 the regional branches of Norges Bank set their own bank rates. We discuss this phenomenon in light of the process of domestic financial integration taking place in the 19th century. Moreover, we analyze how bank rate autonomy could be reconciled with the fixed exchange rate commitments of the silver and gold standard. Although the headquarters of the bank was in Trondhjem, we find that the Christiania branch played the key role in providing leadership in bank rate policy. Foreign interest rate impulses were important for bank rate decisions, but there was also some leeway for responding to idiosyncratic shocks facing the Norwegian economy.