The origins of universal banks in France during the nineteenth century

According to A. Gerschenkron, French banks broadly complied with the general pattern of backward countries. Even though the Crédit Mobilier was an industrial bank, rather than a universal one, its development had to be “understood as emanating from the specific conditions of a relatively backward economy,” i.e. an economy characterized by the scarcity of capital and the weakness of entrepreneurship. Designed to provide industrial firms both with long-term capital and strategic advice, banks were seen as compensatory institutions. In this perspective, it was “the demand-side variables” that determined the structure of French banking.