6 - Central bank co-operation and Romanian stabilisation, 1926–1929

Summary

The collapse of the gold-exchange standard has been attributed to a wide range of factors, monetary and real. Some scholars have emphasised the progressive waning of central bank co-operation over the late 1920s. One attenuating force arose from the incompleteness of European monetary reconstruction after the Banque de France de facto stabilised the franc in December 1926. This was rapidly accompanied, not unexpectedly, by a strengthening of its reserves, and immediately sparked an aspiration within its management to employ their institution's regained stature in securing a leading part in concluding European stabilisation. They were motivated by a number of perceptions. It was thought that the Bank of England had gained advantages from its premier role in previous stabilisation plans in which they now wished to share, together with obtaining the prestige that accrued. Furthermore, many of the states still to re- establish a gold parity – especially Poland and Romania – were regarded as lying within the French sphere of influence. This outlook had gained further weight through the Petite Entente's transformation from an alliance directed against a revanchist Hungary into a quasi-Eastern European security pact for France.

French designs for reconfiguring central bank co-operation met with the aspirations of political leaders in Poland and Romania. There was long-standing antipathy within Romania to foreign capital playing a major role within the country's affairs.