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This book is the first complete survey of the evolution of monetary institutions and practices in Western countries from the Middle Ages to today. It radically rethinks previous attempts at a history of monetary institutions by avoiding institutional approach and shifting the focus away from the Anglo-American experience. Previous histories have been hamstrung by the linear, teleological assessment of the evolution of central banks. Free from such assumptions, Ugolini's work offers bankers and policymakers valuable and profound insights into their institutions Using a functional approach, Ugolini charts an historical trajectory longer and broader than any other attempted on the subject. Moving away from the Anglo-American perspective, the book allows for a richer (and less biased) analysis of long-term trends. The book is ideal for researchers looking to better understand the evolution of the institutions that underlie the global economy.--

International audience ; Nowadays, the idea that lending of last resort is necessarily conducive to moral hazard appears to be generally accepted. This chapter questions this received wisdom by tracking the evolution of monetary theory and practice over the very long term. While most economists have seen as inevitable the association between lending of last resort and moral hazard, others (especially Walter Bagehot) have claimed that the two may be separable if "constructive ambiguity" surrounds the conditions at which emergency liquidity may be accessed by banks. A brief overview of the practices adopted by monetary authorities over the centuries tends to confirm that the separability between lending of last resort and moral hazard may be attainable, but only through a correct design of banking regulation and liquidity-injecting operations.

International audience ; "Central banking" is what a central bank does, but the definition of "central bank" is less straightforward than it may appear at first sight. Following Ugolini (2017), this chapter defines central banking as the provision of public policies aimed at fostering monetary and financial stability, and surveys the historical evolution of such policies in the West from the Middle Ages to today. It shows that institutional equilibria mattered a lot in shaping the way stabilization policies were implemented: central banking evolved in markedly distinct ways in city states (like Venice, Amsterdam, Hamburg, Barcelona, or Genoa), centralized territorial polities (like Naples, Sweden, England, Austria, or France), or decentralized territorial polities (like the United States or the European Union). As a result, the historical evolution of central banking does not appear to have been driven by the "survival of the fittest", but rather by the constant adaptation of policymaking to changing political economy equilibria.

International audience ; "Central banking" is what a central bank does, but the definition of "central bank" is less straightforward than it may appear at first sight. Following Ugolini (2017), this chapter defines central banking as the provision of public policies aimed at fostering monetary and financial stability, and surveys the historical evolution of such policies in the West from the Middle Ages to today. It shows that institutional equilibria mattered a lot in shaping the way stabilization policies were implemented: central banking evolved in markedly distinct ways in city states (like Venice, Amsterdam, Hamburg, Barcelona, or Genoa), centralized territorial polities (like Naples, Sweden, England, Austria, or France), or decentralized territorial polities (like the United States or the European Union). As a result, the historical evolution of central banking does not appear to have been driven by the "survival of the fittest", but rather by the constant adaptation of policymaking to changing political economy equilibria.

National audience ; In most 19th-century centralized states, national monetary unification has been attained thanks to the creation of provincial branch networks by banks of issue. Through a case study on Belgium, this paper investigates the causes and consequences of this phenomenon, as well as its operational implications. It shows that political pressure – aimed at reducing credit rationing, and hence at fostering economic development – was a key factor in pushing reluctant central bankers to extend their operations outside domestic financial centers. The success of monetary unification crucially depended on the incentive structure embedded in the implemented supervisory policies – aimed at reducing risk-taking in the provinces. ; Dans la plupart des Etats centralisés, l'unification monétaire nationale a été atteinte au XIXe siècle par la création de réseaux de succursales de la banque d'émission dans les provinces. A travers une étude de cas sur la Belgique, ce chapitre analyse les causes et les conséquences de ce phénomène, aussi bien que ses implications opérationnelles. Nous montrons que les pressions de nature politique (dont le but était celui de réduire le rationnement de crédit et donc favoriser le développement économique) ont été le facteur principal poussant les frileux banquiers centraux à étendre leurs opérations en dehors des centres financiers domestiques. Le succès du processus d'unification monétaire dépendait de la structure d'incitations créée par les politiques de supervision adoptées (dont le but était celui de réduire la prise de risque dans les provinces).

National audience ; In most 19th-century centralized states, national monetary unification has been attained thanks to the creation of provincial branch networks by banks of issue. Through a case study on Belgium, this paper investigates the causes and consequences of this phenomenon, as well as its operational implications. It shows that political pressure – aimed at reducing credit rationing, and hence at fostering economic development – was a key factor in pushing reluctant central bankers to extend their operations outside domestic financial centers. The success of monetary unification crucially depended on the incentive structure embedded in the implemented supervisory policies – aimed at reducing risk-taking in the provinces. ; Dans la plupart des Etats centralisés, l'unification monétaire nationale a été atteinte au XIXe siècle par la création de réseaux de succursales de la banque d'émission dans les provinces. A travers une étude de cas sur la Belgique, ce chapitre analyse les causes et les conséquences de ce phénomène, aussi bien que ses implications opérationnelles. Nous montrons que les pressions de nature politique (dont le but était celui de réduire le rationnement de crédit et donc favoriser le développement économique) ont été le facteur principal poussant les frileux banquiers centraux à étendre leurs opérations en dehors des centres financiers domestiques. Le succès du processus d'unification monétaire dépendait de la structure d'incitations créée par les politiques de supervision adoptées (dont le but était celui de réduire la prise de risque dans les provinces).

Is a strong commitment to monetary stability enough to ensure credibility? The recent literature suggests it might not be if the central bank cannot perform pure interest rate policy and has to resort to balance sheet policy: the central bank's financial strength (i.e. the long-term sustainability of its policy) is also a determinant of credibility. This paper provides historical evidence on the issue by focusing on the case of the Bank of England at the heyday of the classical gold standard. It shows that as the Bank was not perceived as having the means to fulfil all of its obligations, the efficacy of its interest rate policy was poor. Failing to reform for political economy reasons, the Bank eventually had to default on its formal convertibility mandate. ; publishedVersion

Is a strong commitment to monetary stability enough to ensure credibility? The recent literature suggests it might not be if the central bank cannot perform pure interest rate policy and has to resort to balance sheet policy: the central bank's financial strength (i.e. the long-term sustainability of its policy) is also a determinant of credibility. This paper provides historical evidence on the issue by focusing on the case of the Bank of England at the heyday of the classical gold standard. It shows that as the Bank was not perceived as having the means to fulfil all of its obligations, the efficacy of its interest rate policy was poor. Failing to reform for political economy reasons, the Bank eventually had to default on its formal convertibility mandate.