Shadow banking in Sweden part 2 - experiences from the early 20th century

The project has the ambition to highlight the Swedish issuing company era and see it in a new light. The intense period for the Swedish capital market that is dealt with here can be said to have started after the "1901 Banking Committee" presented its proposal for independent industrial publishing banks (in modern parlance, investment banks). After the Banking Committee's report, a political debate followed for almost a decade until 1909 when new legislation in the area was adopted by the Riksdag. No "bank of issue" as intended by the legislators was ever created. Instead, financial market participants preferred to operate in the form of "limited companies". This was thus a form of organization outside the prevailing banking supervision.

The issuing companies played an important role in creating the Swedish optimism of the 1910s. The deflationary crisis of 1922 brought an abrupt end to the boom period on the Stockholm Stock Exchange, which formed the basis of the companies' activities. Most of the major issuing companies, with a few exceptions, appear to have survived the crisis, but were in decline or changed their business focus. The basic reason for this was that access to capital via the stock market seems to have virtually ceased after 1919 in connection with the economic turnaround.

No attempt at a more comprehensive study of the history of issuing companies has ever been presented. It can be concluded that the issuing company era has only been selectively examined, and the overall empirical knowledge is now rather inadequate.