Central Banks: Origins and Variants

Abstract

The genesis of the theory, organization, and practice of central banking is traditionally associated with the industrial countries which witnessed the foundation of the very first central bank, the Sveriges Riksbank in Sweden (1668), followed by the Bank of England (1694) and the European central banks in the nineteenth century, like the Bank of France (1980), the Bank of Finland (1811), the Netherlands Bank (1814), Austria and Norway (1816), and Denmark (1818) (see Appendix A.1). The origins of central banking doctrine date back to Bishop Berkeley’s pioneering plan of a National Bank for Ireland (1735) in the first edition of his classic The Querist which was followed by the writings of a number of British economists, notably Ricardo (1828), Palmer, Henry Thornton, and Walter Bagehot. But it is hardly known even among the cognoscenti that by far the most extended discussion of central banking in different guises was undertaken in the context of the Indian subcontinent and, most remarkably, almost parallel to the celebrated monetary controversies in England.