Early Public Banks

William Roberds and Francois Velde ()

No WP-2014-3, Working Paper Series from Federal Reserve Bank of Chicago

Abstract: Publicly owned or commissioned banks were common in Europe from the fifteenth century. This survey argues that while the early public banks were characterized by great experimentation in their design, a common goal was to create a liquid and reliable monetary asset in environments where such assets were rare or unavailable. The success of these banks was however never guaranteed, and even well-run banks could become unstable over time as their success made them susceptible to fiscal exploitation. The popularization of bearer notes in the eighteenth century broadened the user base for the public banks? money but was also accompanied by increased fiscal abuse. Wartime demands of the Napoleonic Era resulted in the reorganization or dissolution of many early public banks. A prominent exception was the Bank of England, whose adept management of a fiscally backed money provided a foundation for the development of central banks as they exist today.

Keywords: Central banks; exchanges bank; public banks (search for similar items in EconPapers)
JEL-codes: E58 N13 (search for similar items in EconPapers)
Pages: 98 pages
Date: 2014-02-11
New Economics Papers: this item is included in nep-ban, nep-his, nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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