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The Great War of 1914-1918 upset this delicate balance. Stock market transactions were only suspended for a few days at the end of July, but futures trading the market s most dynamic activity did not resume until the early 1920s. In addition, the suspension of the franc s gold convertibility reduced the attrac- tiveness of the Paris market for foreign governments. Finally, the French government s massive appeal to the market to fund the war forced out private companies. In this context, the Paris finan- cial market began a protracted decline that would lead it, by the early 1980s, to play only a marginal role in the financing of the French economy. The devastation of war is also measured by the duration of its aftershocks.

A major upheaval: the 20th century s rampant inflation begins in 1914

One might venture that when financial markets drop, banks be- nefit since companies and governments will always need to bor- row long-term capital from savers anxious to invest their capital. Certainly, as early as August 1914, banks had started to sup- plant market mechanisms and institutions blocked by the crisis. However, banks did this in the context of a currency issue haste- ned by war, which in turn caused the period s final major finan- cial disruption: inflation. Nominal values (or numbers), which characterise banks, grew at a dizzying pace, indifferent to the country s real wealth or actual losses, whether human or mate- rial. This purely nominal growth was, in fact, inflation. This im- balance, which began in 1914, continued until the 1980s (except on rare occasions), undermining France s currency. The French franc, no longer tied to gold, was only worth 20% of its pre-war value in 1928, less than 1% in 1950, and little more than 0.1 % in 1980. In this context, the doubling or tripling in size of banks was not a sign of their enrichment, too hastily decried between the 1920s and 1980s. Rather, it masked the lasting weakening of banks. In the post-war era, however, the French population did not understand this new form of inflation. The significant increase in banking transaction amounts was perceived as the sign of unjustified enrichment, as proof of an unequal sharing of wealth, rather than as the consequence of higher prices. Under these circumstances, it is no wonder that, for decades, banks were condemned for their hidden wealth and secret power.