Banknote Issuance Research Articles

Своєрідна багатомовність на банкнотах Австро-угорської Монархії

The topic of research devoted to the linguistic landscape is gradually expanding, so the concept itself is constantly acquiring new interpretations. The article considers banknotes as elements of the linguistic landscape, and the linguistic landscape as a reflection of language policy, its peculiar public expression. The issuance of banknotes is strictly regulated by the state, while controlling not only the shape, color, decorative elements, denominations and security elements of the banknotes, but also the symbols and languages that appear on them. Along with portraits of historical figures, images related to the culture and historical past of a certain nation, the presence (or absence) of languages on banknotes is also an element of symbolic politics and a part of revealing the language policy of a certain state. The publication examines the languages that were represented in the inscriptions of various series of banknotes issued in the dualistic Austro-Hungarian Monarchy between 1900 and 1919. The article analyzes the reasons for the appearance of different languages on banknotes of the specified period. Based on the languages depicted on the banknotes, it is shown that the two main parts of the federal state of Austria-Hungary pursued different language policies. The article highlights that, according to the concept of dualism, the German language dominated on one side of the Austro-Hungarian banknotes, and the Hungarian language on the other. On the front side, along with the most important information, which was provided only in German, the denomination of the banknote was indicated in the languages of several nations of the Austro-Hungarian Monarchy. The reverse side was purely monolingual – Hungarian. Therefore, the denomination was indicated on the banknote in a total of ten languages: German, Czech, Croatian, Polish, Italian, Romanian, Serbian, Slovenian, and also Ruthenian or Ukrainian. The article tries to find an answer to why the Czech, Croatian, Serbian, Polish, Italian, Romanian, Slovenian and Ukrainian (Ruthenian) languages were used on banknotes next to German, and why the reverse side of the banknotes remained monolingual (Hungarian). The authors concluded that even states that issue multilingual banknotes guarantee that the state language should be in a dominant position.

Financial and legal status of the european central bank in the institutional structure of the european banking system

The paper deals with the problem of determining the financial and legal status of the European Central Bank (hereinafter referred to as the ECB), analyzing scientific approaches to the essence of the concept of "financial and legal status of the central bank", as well as the constituent elements that determine this status. Particular attention is paid to the correlation between the financial and legal status of the ECB and the National Bank of Ukraine (hereinafter - the NBU), namely: in powers, independence, profit sharing, and functions. The European Central Bank is an organization with a special status. Only the ECB has the exclusive right to authorize the issuance of banknotes on the territory of the community. It should be especially emphasized that banknotes issued by the ECB and national central banks are the only banknotes that have the status of legal tender in the EU. Also, its importance is emphasized by the fact that each of the member states had to ensure, at the latest - before the date of creation of the ESCB, compliance with the Treaty on the European Community and the Statute of the ESCB and the ECB, including the Regulation on the national central bank. The European Central Bank is an organization with a special status. Only the ECB has the exclusive right to authorize the issuance of banknotes on the territory of the community. It should be especially emphasized that banknotes issued by the ECB and national central banks are the only banknotes that have the status of legal tender in the EU. The financial and legal status of central banks is based on the general legal status, therefore, first of all, the general provisions on the legal nature of central banks contained in the laws on these banks are analyzed. The financial and legal status of the ECB in the institutional structure of European banking is defined in the financial and legal functions and powers, namely: in the implementation of foreign exchange operations, management and maintenance of foreign exchange reserves and ensuring the smooth functioning of the payment system, support the general economic policy of the union, and also contribute to the implementation of measures to strengthen the stability of the financial system.

A bankjegyektől a jegybankokig

In the 17-18th century, during the process of civil transformations, starting from the economic policy based on the era of absolutism, the first central bank regulations appeared in Europe. Mainly the disorganization and crisis of public finances and the need to finance various wars led governments to establish central banks and to provide central banking functions to privately owned banks. The most important issues included the regulation of banknote issuance and legal tender, the management of state funds, the financing of the state debt, as well as the relationship with the state, in other words, the content of central bank independence. Each country followed different paths, and accordingly, the classic and the Prussian models of central bank development can be described based on the different legislative steps. The study presents the main characteristics through the English, German, French, American and Hungarian examples, primarily by characterizing the legislative peculiarities and illuminating the political historical background by applying the methods of comparative law.

Private bank money vs central bank money: A historical lesson for CBDC introduction

How does the arrival of a new central-bank issued currency affect commercial banks creating private money? In this paper, we study the opening of Bank of Canada in 1935 and the effects of banknote issuance monopoly on chartered banks. We use bank-level data to provide evidence that banks mostly affected by the currency competition experienced lower profitability but did not decrease their lending compared to unaffected peers. This analysis of the arrival of a new central bank currency can offer lessons for debates on central bank digital currencies (CBDCs).

The reason for usury of gold and silver and its impact on the issuance of banknotes: a descriptive and analytical study (Libyan dinar as a model)

This study revolves around determining the cause of usury in gold and silver and its impact on the nature of issuing banknotes, and applying a practical model to the nature of issuing the Libyan dinar. The problem of the study is determined about determining the reason for usury of the two moneys from the point of view of the Maliki jurists with the old price criterion; Is this standard still in force at the present time? And therefore - if it exists - does it have an impact on the nature of issuing banknotes in their current form?, The nature of this study necessitated the use of the secondary and primary data collection methodology, in addition to the use of the data analysis methodology through the descriptive analytical approach, which depends on the analysis of jurisprudential issues related to determining the cause of usury in the two currencies in order to work on knowing its impact on banknotes, and among the most important conclusions The research: The reason for usury of the two cashes known as the price - if it exists - may be measured on contemporary banknotes with the collector of the common cause, given that the rule revolves with its cause of existence and non-existence. Keywords: banknotes - the bug - gold – silver.

Regulated free banking in Switzerland (1881\u20131907)

The free-banking history of Switzerland is subdivided into periods with unfettered competition (1826–1881), and strict banknote regulation (1881–1907). This paper suggests that the Federal Banknote Act of 1881 was introduced to remedy the fragmentation of the unfettered-competition period, during which private note-issuing banks were unable to issue standardised paper money. Although the corresponding minimum-reserve and mutual-acceptance rules led to a standardisation, they created new problems. For example, these regulatory interventions reduced the flexibility (or “elasticity”) of the paper-money supply. It turned out that a central note-issuing bank is needed to supply adequate amounts of standardised banknotes.

Unregulated and regulated free banking: Evidence from the case of Switzerland (1826–1907)

This paper provides a reassessment of the free-banking history of Switzerland, which included both a period of unfettered competition (1826–1881) and one of strong banknote regulation (1881–1907). Unfettered competition between note-issuing banks gave rise to a fragmented paper-money system, with limited liquidity banknotes. To increase confidence in these notes, the federal government introduced a minimum-reserve requirement and a mutual-conversion rule in 1881. Based on a theoretical model and new empirical evidence, this paper shows that this enhanced regulation came at a cost, as it led to the overissuing of banknotes and an inelastic paper-money supply.

European Central Bank Digital Currency: The Digital Euro. What Design of the Digital Euro Is Possible Within the European Central Bank’s Legal Framework?

This article will discuss the legal framework of Central Bank Digital Currency (CBDC) in the Eurozone. The different designs proposed by the European Central Bank will be examined against the legal framework. The first question that will be examined is whether CBDC could be introduced as part of the issuance of banknotes and be classified as legal tender. It will then consider whether the CBDC can be used as a monetary policy instrument under the ECB’s monetary mandate. To do so this paper will consider two different types of CBDC. The wholesale CBDC is only accessible to financial institutions and the general purpose CBDC which would be accessible to consumers. This paper concludes that CBDC can be introduced as legal tender. And that the introduction as legal tender does not exclude it from being used as a monetary instrument. General purpose CBDC however cannot be introduced under its monetary mandate. This paper considers that the introduction of general purpose CBDC would classify as an economic policy. The aim of such CBDC is socio-economic rather than monetary. Despite the economic mandate, CBDC could not be introduced within the current legal framework. The impact upon the commercial sector would violate the efficient allocation of resources. Therefore the introduction of general purpose CBDC would not be possible under its economic mandate. Lastly, this article examines the possibility of introducing and using CBDC as part of the exchange rate policy. This option is examined concerning the introduction of cryptocurrencies. This paper finds that using CBDC would be lawful under the ECB’s mandate. Using CBDC as part of the exchange rate complements the Commission’s proposed legislation of cryptocurrencies.

Why Can Foreign Banknotes Circulate for a Long Time in Modern China? The Competitive Currency Market in Northeast China and Its Enlightenment

The competition between foreign currencies and domestic currencies is a phenomenon that exists in many developing countries, and it is one of the hot issues in the study of the international currency. An important feature of the currency market in modern China is the long-term circulation of foreign banknotes in China. Foreign banknotes have been circulating in China since the 1870s, while domestic banknotes gradually emerged after the 20th century. After the 1920s, they became increasingly prosperous, forming a competing situation with foreign banknotes. As the most widely circulated area of domestic banknotes, Northeast China is also popular with foreign banknotes. After the 1920s, a competitive monetary system dominated by Fengpiao issued by the official Northeast bank and Jinpiao issued by a Japanese bank was gradually formed.This paper constructs a theoretical model of currency search, and combines the theory of seigniorage, taking the Northeast currency market as an example to explore the mechanism of the currency competition between the two currencies. According to the results of the model, with the change in the exchange rate of the two currencies and the constraints of government policies, the Northeast currency market formed two different competitive equilibriums before and after 1925. Although Jinpiao was subject to the policy of Fengtian authorities in the competition with Fengpiao, it still played an important role in the Northeast currency market. The increasing circulation of Fengpiao reduced the credit of it, and replaced it with Jinpiao. This is an important reason for the continued circulation of Jinpiao in the Northeast.This paper shows that when domestic currencies face the threat of foreign currencies, if the government only restricts the circulation of foreign currencies and ignores the improvement of the credit of domestic currencies, it is difficult to prohibit the use of foreign currencies. Currency competition mainly depends on currency credit, and currency credit is subject to maximizing seigniorage. The decline in money demand is an important factor restricting the government’s issuance of banknotes. An important way to reduce the demand for domestic money is to find alternative currencies. Therefore, the government can balance the currency circulation and money demand to ensure a certain amount of seigniorage and maintain good currency credit, so that the domestic currencies can occupy a dominant position in the competition.In short, this paper mainly contributes in three aspects: First, it supplements and deepens the understanding of the reasons for the circulation of foreign banknotes and the competition mechanism, and makes up for the lack of research on the foreign currency circulation in modern China. Second, it provides empirical evidence for the theory of the currency competition, and demonstrates the important role of currency credit in competition. Third, it deepens our understanding of the current international currency competition and the internationalization of RMB, and provides strategic guidance for the internationalization of RMB. Only by upholding the long-term stability of RMB and building good government credibility, can we promote its competitiveness in various currencies.

Currency Issues and Financial Crises: The Excessive Issuance of Banknotes and Price Fluctuations during the “New Policies” Period in the Late Qing

Currency Issues and Financial Crises: The Excessive Issuance of Banknotes and Price Fluctuations during the “New Policies” Period in the Late Qing

Banks' Reputation Capital and Competitive Issue of Currencies: Evidence from Micro Data of Banks in Republican China on the Eve of Silver Outflow

Hayek put forward the theory of denationalization of money in 1976, and suggested that private banks should be allowed to issue money to restrict the issuance of governments.However, the opponents argued that the private note-issuing banks pursuing private profits would inevitably issue money unlimitedly and finally lead to inflation.This paper analyzes the effect of banks' reputation on note issuance by unifying both the issuance and credit of banks.It demonstrates that the reputation mechanism could effectively restraint note-issuing banks in competitive issuing environment, and the banks in pursuit ofsustainable long-term profits would tend to issue money in moderate rate to maintain its reputation.Furthermore, it employs the survival history of banks or the membership of Shanghai banking association to measure reputation and makes an empirical study to support the hypothesis of goodwill capital by using the micro data of 34 note-issuing banks and 150 banks during the silver outflow in 1930s.It finds that the banks with good reputation do issue money more soundly, and reputation brings the banks various advantages in business such as more paid-in capital, surplus accumulation and deposits, leading to bigger credit scale of banks with good reputation and profits at higher level; note-issuing banks do issue money more soundly actually owing to long-term profits.According to historical experience of competitive issuance of banks in Republican China, this paper provides micro evidence for the theory of denationalization of money put forward by Hayek and some implications for current monetary policy rule and RMB internationalization.

Bank of England Notes: The Switch to Polymer

The Bank of England is responsible for maintaining confidence in banknotes. In meeting its banknote issuance responsibilities, the Bank aims to fully exploit innovation. The next £5, £10 and £20 banknotes will be printed on a polymer material. The switch to polymer will deliver banknotes that are more secure and better quality, and will support confidence in banknotes in the years ahead.

The monetary economics of Jules Dupuit

This paper analyses Dupuit's views on money, bimetallism, free banking and credit. By means of textual and contextual analysis, I argue that Dupuit endorsed the quantity theory based on the neutrality of money. For him, the value of money was determined by supply and demand. The only exception concerned the redistributive effects of gold between trading nations. Dupuit's approach to credit and his views on the issuance of banknotes were distinct from those of most French liberals. He did not consider credit to be capital, and he warned against the overissue of banknotes.

Between Copper, Silver and Gold: Japanese Banks of Issue in Taiwan, Northeast China and Korea, 1879–1937

This article provides the first comparative overview in English of Japanese colonial banks before World War II with an emphasis on their roles as banks of issue in Taiwan, Korea and Northeast China. It discusses at length similarities and differences in these banks’ note circulation patterns, in their note-reserve requirements and their actual application, and in their geographical spread and respective colonial mandates. There was some variation in Japanese bank note issuance in the colonial setting of Korea and Taiwan, in ‘Manchukuo’ and in those parts of China that remained nominally sovereign. But all Japanese colonial banks seem, in one way or another, to have astutely adjusted the spread of their note issue in order to control for flagging demand due to nationalist boycotts, or to conversely cash in on demand spurts for notes resulting from crises in the indigenous financial sector. The banks of issue under review here were theoretically subject to a 100 per cent reserve requirement, but the make-up of their metallic bullion reserve and the degree of their notes’ convertibility were very dissimilar, reflecting varying local conditions. Both in terms of reserve ratios, and note denominations—the banks prudently followed charter obligations that were devised by the Japanese Treasury but, at the same time, were reminiscent of the obligations that British overseas banks also had to abide by. Thus, the findings discussed here shed light on the inception and adaptability of Japanese colonial policy in the lead-up to the Pacific War.

From Chengdu to Stockholm: A Comparative Study of the Emergence of Paper Money in East and West

It is widely recognised that monetary paper instruments appeared in China earlier than in the West, paper itself having been invented there during the Han era. However, there have been to date few direct scholarly attempts to place the early-modern Western and pre-modern Chinese formative experiences with paper money in detailed comparison by way of attaining a better understanding of the evolution of money as a whole. This article aims to make a tentative first step toward bridging this scholarly gap. It will survey in particular the extent to which the inception of Chinese paper money in 11th-century Chengdu differed from the circumstances in which European paper money emerged. Whilst some similarity between 17th-century Stockholm and 11th-century Chengdu might arguably be traced back insofar as the emergence of paper money is concerned, British banknote issuance subsequently took on new important functions. These, in turn, ushered in our modern "national-debt" economy.

Stjórnvald í mótun: Drög að forsögu Seðlabankans

Í greininni er fjallað um seðlabankahlutverk Landsbanka Íslands fram til 1961 þegar Seðlabanki Íslands varð að sjálfstæðri stofnun. Landsbankinn hafði annast seðlaútgáfu frá 1924 og verið skilgreindur sem seðlabanki að lögum frá 1927, en þar sem lögin gengu út frá föstu gullgengi og gullinnlausn krónunnar, sem aldrei varð að veruleika, var það reynslan fremur en lögin sem mótaði seðlabankahlutverk Landsbankans í raun. Seðlabankinn var sérstök deild Landsbankans, fjárhagslega aðskilin frá 1930 (þó hún annaðist fyrst um sinn stóran hluta af viðskiptabankastarfseminni líka) og undir sérstakri stjórn frá 1957, en það var stærsta skrefið í átt til sjálfstæðs seðlabanka. Meðal annars er rætt um afskiptaleysi Landsbankans af falli Íslandsbanka 1930; aðkomu hans að innflutnings- og gjaldeyrishöftum frá því í heimskreppunni; og takmörkuð áhrif hans á vaxtamyndun (hann hafði enga sveigjanlega stýrivexti þótt hann endurkeypti afurðavíxla af bönkunum eftir föstum reglum) þar til hann fékk það hlutverk 1960 að ákvarða inn- og útlánsvexti, jafnframt því sem hann lagði í fyrsta skipti bindiskyldu á bankana. Í þessu fólst fyrsta ákvörðunarvald seðlabankans um peningamál. Áður var þó stjórn seðlabankans, bæði sérstök stjórn hans frá 1957 og enn áður stjórn Landsbankans sem seðlabanka, farin að setja fram sjálfstæð sjónarmið í peningamálum, jafnvel í andstöðu við ríkjandi stjórnarstefnu. Skattfrelsi sparifjár 1954 var t.d. málamiðlun þar sem ríkisstjórnin kom til móts við sjónarmið bankans.

Shanghai's Bund and beyond: British banks, banknote issuance, and monetary policy in China, 1842-1937 - By Niv Horesh

Shanghai's Bund and beyond: British banks, banknote issuance, and monetary policy in China, 1842-1937 - By Niv Horesh

Shanghai's Bund and Beyond: British Banks, Banknote Issuance, and Monetary Policy in China, 1842–1937. By Niv Horesh. New Haven, Conn.: Yale University Press, 2009. xiv, 230 pp. $48.00 (cloth).

Shanghai's Bund and Beyond: British Banks, Banknote Issuance, and Monetary Policy in China, 1842–1937. By Niv Horesh. New Haven, Conn.: Yale University Press, 2009. xiv, 230 pp. $48.00 (cloth). - Volume 69 Issue 1

Fodder Is in the Eye of the Beholder: A Response to Donald A. Jordan's Review of Shanghai's Bund and Beyond: British Banks, Banknote Issuance, and Monetary Policy in China, 1842-1937

Fodder Is in the Eye of the Beholder: A Response to Donald A. Jordan's Review of Shanghai's Bund and Beyond: British Banks, Banknote Issuance, and Monetary Policy in China, 1842-1937

Shanghai's Bund and Beyond: British Banks, Banknote Issuance, and Monetary Policy in China, 1842-1937 (review)

Shanghai's Bund and Beyond: British Banks, Banknote Issuance, and Monetary Policy in China, 1842-1937 (review)