Great Depression: Difference between revisions

[[Urcea]] emerged from the [[Red Interregnum]] in 1902 with a fractured economy, outdated or ruined infrastructure, and an inconsistent regulatory scheme due to unresolved issues of the creation of provinces in the 1890s. As part of his [[History of Urcea (1902-1955)|Restoration]], [[Patrick III of Urcea]] ushered in a period of major infrastructure projects combined with loosened standards on lending in order to stimulate the economy; particularly, the Royal Bank of Urcea and others banks, for the first time, would be allowed to lend on interest. Interest-based lending was previously prohibited as a form of usury; previous efforts to do so had been vetoed by office of [[Censor (Urcea)|Censor]], but [[The Enabling]] allowed the King to bypass a prospective veto in 1903. Consequently, the Royal Bank of Urcea began to issue a considerable amount of loans throughout the southern [[Holy Levantine Empire]], particularly to speculators in [[Urcea]] and [[Burgundie]]. The policy was largely successful throughout the first decade of the 20th century, as the combined effects of major military armament, infrastructure reconstruction, and easily obtainable credit had restored [[Urcea]]'s economy to its 1860s strength by 1907. However, in the early months of 1908, the Royal Bank began to warn the [[Concilium Purpaidá]] that received interest was insufficient and that the Bank may face an insolvency issue by the late 1910s. This information reached the public by December of 1908, and in an effort to restore public confidence the Bank recalled two hundred and fifty of the largest debts. In February of 1909, it became public that almost half of the debts were defaulted on, leading to widespread panic that the bank might recall all of its major debts in order to remain solvent and stave off a potential bank run. Markets sank precipitously on 12 February 1909, known as "Black Friday", as major speculators began to sell their shares in various enterprises in order to cover their debts, starting a chain reaction of major sell-offs throughout the Urcean economy. On the following Monday, 14 February 1909, a similar shock hit [[Burgundie]] and rippled back into [[Urcea]]. King Patrick III ordered a week-long bank holiday to prevent a potential bank run, though many depositors were still observing the situation.