Document Type

Case Study

Case Series

Broad-based Capital Injections

JEL Codes

G01, G28


Between September and December 1925, the Second Polish Republic faced a so-called twin-crisis: the złoty, the Polish currency, collapsed, and the financial system faced bank runs and flights of deposits. On November 28, 1925, the Polish Government established Polish Fundusz Pomocy Instytucjom Kredytowym (FPIK), injecting over PLN 60 million capital through Bank Gospodarstwa Krajowego (BGK), a national development bank. The government-led capital injection scheme kept supporting the unstable Polish financial system during the inter-war period. Furthermore, in the 1930s, the FPIK served not only the large banks but also smaller financial institutions, and sometimes, non-financial companies. While the FPIK successfully buttressed the financial system, the scheme also contributed to the emergence of authoritarian statism, as the state took significant centralized control over the economy during the 1930s.

Date Revised