Nordic Central Bank Cooperation 1931-1939 – Challenging an era of deglobalisation and uncertainty

Kerstins Rum Session 2: Central banking – a science or an art? organized by Lars Fredrik Øksendal and Anders Ögren


Gjermund Forfang Rongved


In the interwar years, Nordic central bank cooperation intensified and expanded. Before World War I, the Scandinavian countries had communicated per letter and thematically narrow as members of Scandinavian Monetary Union (SMU). In the 1920s, some crisis meetings during the war evolved into an institutionalisation of physical SMU meetings which gradually broadened the cooperation thematically, although a major theme was re-establishing the union. Despite Iceland formally becoming part of the union in 1924, the union broke up with the end of the gold standard in 1931. Along the way, the scope of Scandinavian central bank cooperation had expanded considerably, and with it the urge to encompass the entire Nordic region. Hence at the September 1931 meeting in the home of Riksbank governor Ivar Rooth, where it was decided to follow the British lead and abandon the gold standard, Finland participated for the first time, with Finnish central bank governor – and later Prime Minister and President – Risto Ryti.

The 1931 meeting marks a new era of Nordic central bank cooperation, and the cooperation of the 1930s is interesting in many respects. The Nordics had to navigate in unchartered waters without the gold compass, and at that when threatened by a political and economic storm. Hence, this happened at a time when the Great Depression threatened the global economies, when international political, economic, and monetary cooperation disentangled, with pressure from the growth of new major social groups nationally, and generally in an age where increased theoretical, political, and social criticism of central bank policies challenged their position. Although primarily looking out for their national economies, the Nordics were nevertheless dependent on international economic cooperation to overcome the crisis, and hence the central bank cooperation of the 1930s is an interesting – yet completely overlooked – field of study on several levels.

Based on the central bank archives of the Scandinavian central banks, this article discusses several research questions:

  1. At the most basic level, what was discussed at the Nordic central bank meetings in the 1930s and how did this cooperation evolve over the decade?
  2. Was new theoretical and political criticism of the central banks discussed at the Nordic central bank meetings, and how did the central banks respond?
  3. How did the Nordic central banks balance their concern for their national economies against the need to cooperate to overcome difficulties?
  4. How did the Nordic central banks balance Nordic cooperation with that of new international central bank cooperation efforts like the BIS, and did they join forces to try to even out the power imbalance favouring the Great powers?
  5. To the extent that the Nordic central banks were part of governmental efforts to counter the economic crisis and gradually had their independence curbed, how were they made part of and how did they respond to international small power efforts like the economic cooperation of the Oslo states, and did this conflict with their relationship with the central banks of the Great powers?


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