 Maximizing profits or pursuing the public good? The bank of Spain as a central bankPablo Martín-Aceña, Elena Martínez-Ruiz and Pilar Nogues-Marco No unige:124125, Working Papers from University of Geneva, Paul Bairoch Institute of Economic History Abstract: The purpose of this study is to examine whether the transition from a system of various issuing banks to a monopoly system was a step in the Bank of Spain becoming a central bank in the true sense of the word (a non-profit maximizing bank); or on the contrary, whether the Bank used its privilege as the only private issuing institution to obtain extra profits, and neglected its duties as a central bank. The study shows that thanks to the monopoly, the Spanish issuer obtained extraordinary profits (above the average for the sector). We also show that the Bank's "private interest" prevailed over the "public interest" (convertibility into gold) and that the monopoly was not a decisive step in its becoming a genuine central bank. The Bank of Spain was a very profitable financial institution for its shareholders, and little concerned with the public interest. History shows that the Bank of Spain's transformation into an institution responsible for monetary and financial policy did not occur until well into the twentieth century. Keywords: Bank of Spain; Central banks; Banking market structure; Issuing monopoly; Profit-maximizing issuing banks (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:gnv:wpaper:unige:124125 Access Statistics for this paper More papers in Working Papers from University of Geneva, Paul Bairoch Institute of Economic History Contact information at EDIRC. |
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