The Palmer Rule and the convertibility of bank notes in Spain
No 1614, Documentos de Trabajo (DT-AEHE) from Asociación Española de Historia Económica
Research on banking systems has token as a frame of reference the English banking system. Precisely because the English banking system was early, it had opportunities to explore certain control mechanisms that favored the extension of the bill of bank. One such mechanism was known as Palmer Rule, a rule stating that a well-managed bank should keep in its cash box one third of its responsibilities. This rule allowed maintaining the convertibility of notes, giving confidence to customers and encouraging the spread paper money. In Spain it has been discussed about the convertibility of the note in the last quarter of the nineteenth century. This work includes to the discussion the Palmer rule, crucial to understanding why the ticket of the Bank of Spain ceased to be convertible de facto in the late nineteenth century, although the inconvertibility is not legally established until 1946.
Keywords: Palmer rule; Convertibility; Banking history; Banking rules; Spain (search for similar items in EconPapers)
JEL-codes: E42 E58 N14 N24 (search for similar items in EconPapers)
Pages: 32 pages
New Economics Papers: this item is included in nep-cse, nep-his, nep-mac, nep-mon and nep-pay
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Persistent link: https://EconPapers.repec.org/RePEc:ahe:dtaehe:1614
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