بازار اوراق قرضه و مشروعیت دولت ویشی فرانسه

During World War II, the spread between the 3 percent rentes and the Vichy government bonds reflected French investors’ perception of the shifting fortunes of war and the willingness of future post-war government to repay the debt issued by the collaborationist regime. Structural breaks in this spread do not always match with the dates of major military events but are more closely related to the political ones, emphasizing the struggle for legitimacy by rival claimants to power.

Recent studies have offered new approaches to identify important military and political news in wartime in the movement of asset prices.1 This paper is based on an original data set of daily bond prices for two issues traded in France during World War II from May 27, 1942 to the end of the war. The only significant difference between these bonds is the issuing government. One was issued by the Third Republic before the war and the other by the Vichy regime. The price differential captures the relative credit risk and should measure the legitimacy of the claimants to govern post-war France and their perceived promises to reimburse each type of debt. This study reveals French investors changing expectations about the outcome of World War II.

This paper investigates the information content of French bond prices during World War II. It shows that agents ascribed different default risks to pre-war and to occupation bonds. Fluctuations in the price differential is a pure measure of the relative credit risk, reflecting key political and military events. Breakpoints indicate that investors reacted to important unanticipated news. The empirical results identify two important breakpoints that correspond to events that reinforced de Gaulle’s claim to be the legitimate French government. The third breakpoint, on June 30, 1944, is linked to news that Allies would not set up a government of occupation.