Evolution of Central Banking?: De Nederlandsche Bank 1814 -1852

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Springer, Dec 29, 2014 - Business & Economics - 170 pages

The book analyses the establishment of De Nederlandsche Bank and its early development as a case study to test competing theories on the historical development of central banking. It is shown that the establishment of DNB can be explained by both the fiscal theory and the financial stability theory. Later development makes clear that the financial stability role of DNB prevailed. DNB ́s bank notes were not forced onto the public and competition was fierce. A prudent and independent stance was necessary to be able to play its intended role. This meant that DNB played a modest role in the Amsterdam money market until 1852. By 1852 it had established itself to become the central bank. By then its bank notes had become generally accepted and it could start to operate as a reserve bank. Also the market context had changed dramatically, its competitors had been driven out of the market and several credit institutions had become customers of DNB.

"On the occasion of the Nederlandsche Bank's 200th Anniversary, it is good to have a new, and an extremely good, history of its founding and first fifty years of operation. The only previous account of this period of the DNB's history was legalistic and did not sufficiently place the Bank ́s development in its wider context. Uittenbogaard's book provides a much broader, and better, story of the personnel, economics, and finance of the DNB at this juncture." - Charles Goodhart, LSE.

 

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Contents

Introduction
1
Theories on the Emergence and Development of Central Banking
11
Dutch Economy and State 18001860
31
Establishment of De Nederlandsche Bank in 1814
47
Corporate Governance of DNB
69
Relationship to the Government
83
DNBs Role in the Payment System 18141852
103
DNBs Credit Policy 18141870
123
Summary and Conclusion
149
Granger Causality Test Market Rate Bank Rate
157
OrderedProbit Regressions
159
A Monetary Policy Reaction Function for DNB 18141870I am grateful to Bastiaan Overvest ACM for his help in this ex
169
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