Private central bank
Private central banks are privately owned central banks. They are linked to a market economy, i.e. a decentralized organization of the monetary system with several central banks. They had their greatest distribution from the 16th to the beginning of the 20th century. Today money is put into circulation almost everywhere in the world by only one (quasi) state, nominally and de jure independent monopoly central bank, the respective central bank, which is responsible for a currency area or state . Common historical forerunners are the note banks, which were private central banks.
overview
A private central bank is a slip, exchange or central bank in private ownership. The turnover of this credit institution was made through the input and output of currencies . Historically, coins , Bancozettel , cash instructions or notes issued.
The private rights to issue a currency were only restricted by corresponding laws such as the money shelf or the currency monopoly . Often the privileged issuance was assigned to central banks that were privately organized.
European history
16./17./18. century
In the 16th century, note and exchange banks developed in Europe . Notes and bills of exchange were historical forerunners of banknotes .
On July 16, 1661, the Bank of Stockholm , a private central bank, issued the first official banknotes in Europe. The bank got into trouble because too many banknotes were printed.
After the goldsmiths in England increasingly issued their bills of exchange without endorsement and promised interest , these took on the character of banknotes. With the trust of the customers in the creditworthiness of the goldsmiths, which was monitored by the guild of the Worshipful Company of Goldsmiths , it became possible to issue bills of exchange beyond the amount of the deposits. Some goldsmiths became early central banks. Of these banks, however, only C. Hoare & Co, founded in 1672 by Sir Richard Hoare , still exists today .
In England, in 1694 , King William granted the Scottish merchant Paterson, in return for a large loan, the approval to found the Bank of England and the right to issue initially handwritten and now factual banknotes. In 1708 the Bank of England was given the privilege of not being allowed to issue banknotes in England and Wales with more than six partners. Therefore the British private central banks remained small.
This development was also followed in Germany . The banco notes came into circulation, which eliminated the shortage of funds.
While the private central banks remained small in England, it was different in Scotland . With the Bank of Scotland (founded in 1695), the Royal Bank of Scotland (founded in 1727) and the British Linen Company (founded in 1746) large private central banks emerged that are still in existence today.
19th century
The development of the private central banks was interrupted by the English central bank legislation, the Peel Bank Act of 1844. The power to issue banknotes for Wales and England was thus passed by law to the Bank of England, making the pound sterling legal tender and issuing banknotes to a national central bank. New private central banks were no longer licensed. The banknotes in circulation in the existing private central banks were limited to the volume in 1844. Of the original more than 4,000 central banks, only 300 still existed in 1844.
After Peel's banking act, a currency monopoly spread in the respective states of Europe , so that one or more privileged, state-supervised banks or state banks took on this task.
In Germany, there was a real wave of private central banks being founded in the mid-1850s. While there were nine central banks in Germany in 1851, the number rose to 19 in 1856, to 29 in 1857 and peaked at 33 in 1875.
With the establishment of the empire in 1871, the member states of the empire lost their legislative rights with regard to the monetary system. The banknote blocking laws of March 27 and June 16, 1870 regulated the hitherto unhindered issuance of private banknotes as well as the issuance of paper money with a low face value in the respective national currencies.
By the law of December 4, 1871, the gold content of the new currency Mark was determined with the Reichsgoldmünze and this was applied to all national currencies (guilders, thalers, etc.) by the Mint Act of July 9, 1873. The mark was introduced on January 1, 1876 throughout the entire Reich.
In the Banking Act of March 14, 1875, Section 61 stipulated that the Prussian Bank, as the largest private central bank, would be ceded to the German Reich and that it would become the state's national bank under the name Reichsbank . Furthermore, all existing private central banks were granted the right to issue a limited number of their own banknotes. However, thirteen private central banks waived this right in 1875.
German private central banks
Before the Banking Act of March 14, 1875, there were 33 private central banks in the German Empire , most of which were founded between 1850 and 1860. They were allowed to issue banknotes in their own name. The state Reichsbank emerged from the Prussian Central Bank through the Banking Act . Since this became the dominant institute, the number of competing private central banks shrank again to 17 institutes by 1878. The annual balance sheets can be found in the statistical yearbooks . Seven central banks survived the beginning of the 20th century. After the hyperinflation of 1923 , the Private Central Bank Act of 1924 ordered its dissolution at the end of 1934.
The Deutsch-Asiatische Bank was the private central bank of the German protected area Kiautschou . The Kurhessische Leih- und Commerzbank was the only private central bank without a formal license.
The Reichsbank retained a banknote privilege in the German Reich until the Private Banknote Act of 1924; after 1934 it received the banknote monopoly in the Third Reich.
20th and 21st centuries
Of the 300 central banks that still existed in 1844, 60 still existed in England in 1901. In 1921, the last private bank stopped issuing banknotes there. There were now 9 Scottish and 5 Irish private central banks in the UK.
With the end of the Empire in 1918, there were only four private central banks in Germany: the Bavarian central bank in Munich, the Badische Bank in Mannheim, the Saxon Bank in Dresden and the Württembergische central bank in Stuttgart. The Private Central Bank Act of August 30, 1924 was enacted to regulate the legal status of these banks .
With the seizure of power of the Nazis the score privilege of these banks was lifted. Formally, a right of termination after 10 years from the 1924 law was used, so that the banks had to stop their banknote transactions on December 31, 1934. The banknotes were withdrawn by the end of 1936 and replaced by Reichsbanknotes. This ended the history of private central banks in Germany.
The currency monopoly was assigned world almost without exception, only central banks in non-private ownership. One of these exceptions is the United Kingdom , where to this day three Scottish banks and four Northern Irish banks still have the right to issue their own banknotes.
Todays situation
Even today, a number of central banks are wholly or partly privately owned. However, this is bogus ownership, as the owners cannot exercise their ownership rights with regard to sovereign duties and questions of money creation.
- The Banca d'Italia is owned by 60 shareholders (banks and insurance companies). The largest shareholders are Intesa Sanpaolo (30.34%) and Unicredit (22.11%).
- The Swiss National Bank is a listed stock corporation. However, more than half of the registered shares belong to cantons and cantonal banks .
- The US Fed has private shareholders: the twelve regional reserve banks are partly owned by their members, the American commercial banks.
- The Hong Kong dollar banknotes are issued by two private banks ( Standard Chartered Bank and HSBC ) and the state-owned Bank of China .
- The National Bank of Belgium is a public limited company in which the Belgian state legally holds half of the shares.
Scientific discussion
Some scholars argue in favor of realizing free banking . They demand a renunciation of state banking regulation and the regulation of commercial and central banks through free market competition and independent private institutions (e.g. consumer protection organizations ). As a consequence, this would enable the unrestricted authorization of private central banks. This position is clearly a minority position in economics.
See also
literature
- Karl Erich Born : The development of the banknote from "slip" to legal tender. In: Academy of Sciences and Literature (ed.): Treatises of the humanities and social science class. No. 1. 1972.
- Heinz Fengler: History of the German central banks before the introduction of the mark currency. Gietl, Regenstauf 1992, ISBN 3-924861-05-6 .
- Deutsche Bundesbank : Paper money in the German Reich 1871-1948. Frankfurt am Main, 1965, p. 13 ff.
Web links
Individual evidence
- ↑ Fengler, 1992, pp. 20-23.
- ↑ BGBl. 1870, pp. 51–52 of March 27, 1870 [1]
- ↑ BGBl. 1870, pp. 507–508 of June 16, 1870 [2]
- ↑ RGBl. 1871, pp. 404-406 of December 4, 1871
- ↑ Coin Act and RGBl. 1873, pp. 233-240 of July 9, 1873
- ↑ RGBl. 1875 p. 303 of September 22, 1875
- ↑ Banking Act RGBl. 1875, pp. 177-198 of March 14, 1875 [3] and on Wikisource
- ↑ RGBl. 1875, pp. 215-218, May 18, 1875
- ↑ Annex to Section 9 of the Banking Act of March 14, 1875
- ↑ Announcement RGBl. 1876, p. 124 of April 1, 1876
- ↑ Willi Albers (Ed.): Concise Dictionary of Economics (HdWW). Volume 5. 1980, ISBN 3525102569 , p. 329 ff. (Online) .
- ↑ Private Central Bank Act of August 30, 1924, in RGBl. II, 1924, No. 32, p. 246 ff
- ↑ central banks as stock corporations; in: FAZ of November 23, 2013, p. 14
- ↑ https://www.nbb.be/de/die-nationalbank/informationen-fur-die-aktionare/aktie-und-dividende
- ^ Melvin W. Reder, Economics: The Culture of a Controversial Science . The University of Chicago Press, 1999, ISBN 0-226-70609-5 , p. 253.
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