Bank of Isabella II
Encyclopedia
The Bank of Isabella II was a financial institution in Spain
, created by a Royal Decree of 25 January 1844 as a bank that, together with the Bank of San Fernando
, began the process of establishing a Spanish banking apparatus adequate for industrialization and the transformation from feudalism
to capitalism
. Although not officially a bank of issue, it issued bonds
that "were banknotes in all but name." In theory it was an equal competitor to the Bank of San Fernando. In practice it focused in the private sector, as a bank for industry.
Among the main founders of the bank were José de Salamanca, Nazario Carriquiri, Alejandro Aguado, Gaspar Remisa, José Buschenthal, and Domingo de Norzagaray. The bank had initial capital of 100 million reales
in shares
and credit
s. It made generous loans to industrial and mining enterprises, but also to prominent members of the Spanish royal family such as the queen mother
and former regent
Maria Christina of the Two Sicilies
and her husband, both of whom speculated heavily in railways. It favored the Moderate
governments of General Ramón María Narváez. It bought shares of other French
and British
financial institutions, some of which were its own creditors. It made many loans to insolvent companies, many owned by its own managers. Its risky approach to finance did not fare well. To save it from failure, on 25 February 1847 the Minister of Finance
merged it with the much healthier Bank of San Fernando
, which focused its activity on the finances of the State. The resulting bank retained the name Bank of San Fernando until 1856, when it became the Bank of Spain.
Spain
Spain , officially the Kingdom of Spain languages]] under the European Charter for Regional or Minority Languages. In each of these, Spain's official name is as follows:;;;;;;), is a country and member state of the European Union located in southwestern Europe on the Iberian Peninsula...
, created by a Royal Decree of 25 January 1844 as a bank that, together with the Bank of San Fernando
Bank of San Fernando
The Bank of San Fernando was a financial institution created in Spain in 1829 at the initiative of Finance Minister Luis López Ballesteros, replacing the old Bank of San Carlos...
, began the process of establishing a Spanish banking apparatus adequate for industrialization and the transformation from feudalism
Feudalism
Feudalism was a set of legal and military customs in medieval Europe that flourished between the 9th and 15th centuries, which, broadly defined, was a system for ordering society around relationships derived from the holding of land in exchange for service or labour.Although derived from the...
to capitalism
Capitalism
Capitalism is an economic system that became dominant in the Western world following the demise of feudalism. There is no consensus on the precise definition nor on how the term should be used as a historical category...
. Although not officially a bank of issue, it issued bonds
Bond (finance)
In finance, a bond is a debt security, in which the authorized issuer owes the holders a debt and, depending on the terms of the bond, is obliged to pay interest to use and/or to repay the principal at a later date, termed maturity...
that "were banknotes in all but name." In theory it was an equal competitor to the Bank of San Fernando. In practice it focused in the private sector, as a bank for industry.
Among the main founders of the bank were José de Salamanca, Nazario Carriquiri, Alejandro Aguado, Gaspar Remisa, José Buschenthal, and Domingo de Norzagaray. The bank had initial capital of 100 million reales
Spanish real
The real was a unit of currency in Spain for several centuries after the mid-14th century, but changed in value relative to other units introduced...
in shares
Share (finance)
A joint stock company divides its capital into units of equal denomination. Each unit is called a share. These units are offered for sale to raise capital. This is termed as issuing shares. A person who buys share/shares of the company is called a shareholder, and by acquiring share or shares in...
and credit
Credit (finance)
Credit is the trust which allows one party to provide resources to another party where that second party does not reimburse the first party immediately , but instead arranges either to repay or return those resources at a later date. The resources provided may be financial Credit is the trust...
s. It made generous loans to industrial and mining enterprises, but also to prominent members of the Spanish royal family such as the queen mother
Queen mother
Queen Mother is a title or position reserved for a widowed queen consort whose son or daughter from that marriage is the reigning monarch. The term has been used in English since at least 1577...
and former regent
Regent
A regent, from the Latin regens "one who reigns", is a person selected to act as head of state because the ruler is a minor, not present, or debilitated. Currently there are only two ruling Regencies in the world, sovereign Liechtenstein and the Malaysian constitutive state of Terengganu...
Maria Christina of the Two Sicilies
Maria Christina of the Two Sicilies
Maria Christina of the Two Sicilies was Queen consort of Spain and Regent of Spain .-Early years and first marriage:...
and her husband, both of whom speculated heavily in railways. It favored the Moderate
Moderate Party (Spain)
The Moderate Party or Moderate Liberal Party was one of the two Spanish political parties that contended for power during the reign of Isabel II...
governments of General Ramón María Narváez. It bought shares of other French
France
The French Republic , The French Republic , The French Republic , (commonly known as France , is a unitary semi-presidential republic in Western Europe with several overseas territories and islands located on other continents and in the Indian, Pacific, and Atlantic oceans. Metropolitan France...
and British
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
financial institutions, some of which were its own creditors. It made many loans to insolvent companies, many owned by its own managers. Its risky approach to finance did not fare well. To save it from failure, on 25 February 1847 the Minister of Finance
Ministry of Economy and Finance (Spain)
The Ministry of Economy and Finance is the Ministry of Economic affairs and Second Vice President of the Government of SpainThis Ministry is in charge of the development, proposal and execution of the economical policy of the government, specially of the State Budgets, the control of Public...
merged it with the much healthier Bank of San Fernando
Bank of San Fernando
The Bank of San Fernando was a financial institution created in Spain in 1829 at the initiative of Finance Minister Luis López Ballesteros, replacing the old Bank of San Carlos...
, which focused its activity on the finances of the State. The resulting bank retained the name Bank of San Fernando until 1856, when it became the Bank of Spain.