‘The long road to Bank of England: characters and diffusion of early central banks, 1401-1694’

This paper covers the theoretical issues and wider historical frame behind my doctoral research, titled “A study of the Taula de Canvi and the Banc of Barcelona in connection to the Wisselbank of Amsterdam, 1468-1652”, supervised by prof David Abulafia, and will be submitted for publication in fall.

I intend to present a comprehensive survey of the characters, evolution and diffusion of public banking in Europe, from its earliest theorizations occurred in Venice (1350s) to the establishment of Bank of England (1694). Between these chronological boundaries – despite historians of the calibre of Braudel deemed the birth of public banking “crucial” for European financial development –, common orthodoxy simply recognizes the existence of a “primordial soup”, to be intended as a categorization where such stabilizing public institutions – operating deposits, transfers, monetary control and, sometimes, public debt management – experienced alternate fortunes and featured diverse juridical statuses and capitalizations, recurring losses of public trust and a high degree of experimentation. In this view, the establishment of the Wisselbank of Amsterdam (1609) marked both the adulthood of public banks and the birth of central banking.

Drawing from archival examples ranging from Catalonia to Italy and Northern Europe, I will initially provide a definition, in which public banks originated as bottom-up practical solutions to widespread problems and shared one fundamental feature, that is, the mission to ensure the financial well-being of their city. Furthermore, I will outline a five-step scheme which frames the condition for public banking to occur – or not to, as in the notable case of Flanders. From this renewed reading, I will then connect public banks established after the Taula de Canvì de Barcelona (1401), focusing on discerning between technological transfer of institutional models and natural development, as well as tracing the evolution of their activities, slowing converging towards monetary control and public debt amortization. One of the general conclusions shows how a plethora of non-cooperative attempts to deal with financial crises and monetary problems – such as debasement and devaluation – became the basis for the creation of a network of giro-banks and, eventually, led to the dawn of central banking with the Stockholm Banco (1656) and Bank of England.