Steam Engines of Credit: The Role of Banks in Switzerland’s Economic Development, 1850-1913


  • Daniel C. Giedeman Grand Valley State University
  • Ryan A. Compton University of Manitoba


From the mid-nineteenth century to the beginning of World War One, the Swiss economy grew to be among the most advanced in the world. Economists however have not yet completely determined the reasons for Switzerland’s economic success. One source of this success may have been the Swiss banking system. This article explores the link between Swiss banks and Swiss economic development using historical analysis and time series econometric techniques. The evidence suggests that Switzerland’s banks contributed to Swiss economic success and that Switzerland’s universal banks in particular contributed to the country’s industrial development.