Abstract for “The quest for stability: early public banking in the Mediterranean, 14th to 16th c.”

by Jocopo Sartori

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Early public banks have been deemed by the renowned French historian Fernand Braudel as ‘a crucial event’ in European history. The expansion of public finance of the late middle ages brought with itself an array of economic and financial problems, ranging from the burden of public debt to lack of specie and debasement, all worsened by the unreliability of private bankers. The solution came in the form of a macro-group of diverse ledger-based deposit- and transfer- banks, as well as, from a later stage, primitive banks of issue, all licensed by a public authority and subject to its supervision as well as, often, ownership and management. Business models also varied considerably and evolved through time, but, by and large, banking operations – often sustained through monopolies – focused on the performance of systemic duties in response to such issues. Book-transfers provided a stable cashless payment system, the provision of stable liquid assets (bank-money) through cashless transactions to counter poor quality and scarcity of the money-supply. deposits and money-changing could filter clipped or debased coinage and fractional-reserve could fund debt and debt amortization. Ultimately, they aimed at restoring trust and ensure resilience, and proved a fundamental input for the evolution of modern financial markets and central banks.

In the period 1350–1750 – and above all in the 16th c. – many such institutions appeared in Mediterranean and Western Europe and experienced alternate fortunes. From earliest 14th-15th c. Catalan attempts, to the Banco di Rialto in Venice (1587), to the highly-celebrated Wisselbank of Amsterdam (1609), such ‘solutions’ underwent diffusion by imitation, and models can be traced. However, despite being a classical topic of historiographical research, the sheer magnitude of the diffusion of public banking evades historians. Smaller and peripheric cities copied banking models, in their quest to stabilize public finances and smoothening transactions. Tracing all known Mediterranean examples through archival and printed was the aim of this paper, ultimately showing how Northern-European 17th c. advances in England and the Netherlands were the heirs of the multifaceted and multi-regional Mediterranean public banking tradition.

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