PA LG R AV E M AC M I L L A N S T U D I E S I N BANKING AND FINANCIAL INSTITUTIONS S E R I E S E D I TO R : P H I L I P M O LY N E U X The Origins and Nature of Scandinavian Central Banking Steffen Elkiær Andersen Palgrave Macmillan Studies in Banking and Financial Institutions Series Editor Philip Molyneux Bangor University United Kingdom Aim of the Series The Palgrave Macmillan Studies in Banking and Financial Institutions series is international in orientation and includes studies of banking systems in particular countries or regions as well as contemporary themes such as Islamic Banking, Financial Exclusion, Mergers and Acquisitions, Risk Management, and IT in Banking The books focus on research and practice and include up to date and innovative studies that cover issues which impact banking systems globally More information about this series at http://www.palgrave.com/series/14678 Steffen Elkiær Andersen The Origins and Nature of Scandinavian Central Banking Steffen Elkiær Andersen Rungsted, Denmark Palgrave Macmillan Studies in Banking and Financial Institutions ISBN 978-3-319-39749-8 ISBN 978-3-319-39750-4 (eBook) DOI 10.1007/978-3-319-39750-4 Library of Congress Control Number: 2016955717 © The Editor(s) (if applicable) and The Author(s) 2016 This work is subject to copyright All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed The use of general descriptive names, registered names, trademarks, service marks, etc in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication Neither the publisher nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made Cover image © Gaia Moments / Alamy Stock Photo Printed on acid-free paper This Palgrave Macmillan imprint is published by Springer Nature The registered company is Springer International Publishing AG Switzerland Preface and Acknowledgements The very early and tender seeds for this book were sown in the mid-1990s, when I was travelling in Italy with my bridge club One of the bridge club members, my old friend, Flemming Farup, asked me: “Steffen, what is really the difference between a central bank and an ordinary bank? What sort of an animal is a central bank really?” Flemming Farup, a jurist from the University of Copenhagen, was employed all his working life at Danmarks Nationalbank, ending his career as head of department for HR, organization, and security However, he is neither an economist nor a banker His question demonstrates that even for high ranking officials of a central bank, the nature and essence of central banking can be elusive concepts I am by no means implying that all, or even the majority of, economists, financial journalists, and politicians have captured the idea To what extent I have understood it, I will leave to others to judge There were two reasons why Flemming thought he might get some sort of answer from me One reason was that I am an economist and was a banker most of my working life While studying at the University of Copenhagen, I specialized in monetary theory and economic history I was fortunate to count among my teachers Ms Bodil Nyboe Andersen, the later head governor of Danmarks Nationalbank, as well as the internationally well-known professor Niels Thygesen, a member of the Delors Committee and thus one of the founding fathers of the euro The second reason was that my father, Svend Andersen, was a governor v vi Preface and Acknowledgements of Danmarks Nationalbank at that time and in that capacity Flemming’s boss Flemming probably thought that he could not ask his boss directly: “Mr Andersen, what are you really doing?” so he asked me instead My father died many years ago, but I hope he would have liked this book It is dedicated to his memory I learnt much about life from him, not only about the perennial problems of balance of payments, foreign exchange shortage, inflation, and government profligacy His understanding of politics and history was certainly also an inspiration for me However, while Flemming Farup’s question from the 1990s kept lingering at the back of my mind, another event sparked new life into the question In 2014, in commemoration of the outbreak of the Great War, the Banque de France organized a conference on the subject of how the Great War affected the central banks of belligerent as well as neutral countries As a member of the European Association for Banking and Financial History (EABH), I was invited to present a paper at that conference Chapters 1, 2, and in this book are (substantially) expanded versions of the paper I presented at the Paris conference in November 2014 I am grateful to both the Banque de France and to the EABH for having provided me with that opportunity In the spring of 2015, I suggested to Palgrave Macmillan that the paper prepared for the Banque de France conference be expanded to a book on the origins and nature of Scandinavian central banking I am happy that the proposal was accepted I also saw it as an opportunity to produce what could be seen as a sort of “Volume II” to my earlier book, The Evolution of Nordic Finance (Palgrave Macmillan, 2010) I am happy and grateful that I have had the assistance from a number of people without whose helpful support this book would have been far less meaningful, if it would have appeared at all I am particularly in debt to Jens Thomsen, a former member of the board of governors of Danmarks Nationalbank He reviewed for me the above-mentioned paper I presented at the Banque de France conference and, later, the Chap of the present book I took due note of his comments Jens Thomsen and I are both members of the Copenhagen Executive Forum, a private “discussion group”, chaired by the above-mentioned Flemming Farup Together, we have visited a number of the European central banks and other European institutions, including the ECB Preface and Acknowledgements vii I am also indebted to Jan E. Qvigstad, a former member of the board of governors of Norges Bank and a co-author of writings celebrating the 200-year anniversary of the founding of Norges Bank (2016) He spent much of his precious time patiently answering my questions Mention should also be made of Hans Dellmo, for whose help I am grateful Finally, I am eternally indebted to Marie Holm Hvidt, my lovely niece, who took upon herself the arduous task of transforming my manuscript into a format the publisher could accept Of course, I also have to thank my delightful wife for the patience and forbearance she has shown during my years of preoccupation with this work If my preoccupation has occasionally made me appear shorttempered, I apologize In spite of all the help I have had, any remaining errors, misrepresentations, and misunderstandings are, of course, my sole responsibility Steffen Elkiær Andersen Rungsted, Denmark July, 2016 Contents Part I The Nature of Central Banking Some General Remarks on “Central Banking” 1.1 The Emerging Public Interest in “Central Banking” 1.2 Some Preconditions for Having “Central Banks” Defining “Central Banks”: Four Criteria 2.1 From Chartered Banks to Central Banks 2.2 The Four Criteria Defining Central Banks 2.2.1 Criterion I: Being the Sole Note-Issuing Bank in the Country 2.2.2 Criterion II: Being the Guardian of the Value of the Country’s Currency 2.2.3 Criterion III: Being the Bank for the  Government 2.2.4 Criterion IV: Being the Bank for the  Country’s Other Banks 2.3 What Is Not Mentioned? 3 11 11 12 12 13 16 17 20 ix x Contents Part II Before the Deluge The Very Different Origins of Scandinavia’s Central Banks, the Great War, and the Four Criteria Sveriges Riksbank, and the Four Criteria 3.1 The Origins Stockholms Banco (1656) and the  Invention of Banknotes 3.1.1 The Political Scenario 3.1.2 Stockholms Banco, War Finance and the  Invention of Banknotes (1656–1664) 3.2 Sveriges Riksbank (1668–1866–1914) 3.2.1 The Formation, Organization, and Operation of the Bank 3.2.2 Sveriges Riksbank as an Issuer of Banknotes (Criterion I) 3.2.3 Sveriges Riksbank as Guardian of the Currency (Criterion II) 3.2.4 Being the Banker for the Government Criterion III 3.2.5 Sveriges Riksbank as Bank for the Country’s Other Banks (Criterion IV) Danmarks Nationalbank and the Four Criteria 4.1 The Origins The Copenhagen Bank (1736–1813) 4.1.1 The Political Scenario 4.1.2 The Copenhagen Bank (or the Kurantbank) 4.1.3 An Interlude The Rigsbank, (1813–1815) 4.2 Nationalbanken i Kiøbenhavn (1818–1936) 4.2.1 The Scenario 4.2.2 Nationalbanken as an Issuer of Banknotes (Criterion I) 4.2.3 Nationalbanken as Guardian of the Currency (Criterion II) 4.2.4 The Nationalbank as Bank for the  Government (Criterion III) 4.2.5 The Nationalbank as Bank for the Country’s Other Banks (Criterion IV) 23 25 25 25 27 30 30 35 38 44 46 53 53 53 55 59 61 61 63 64 66 67 Bibliography 223 Hagerups Forlag and Københavns Universitet, 1923 Nielsen, A Den Skandinaviske Møntunion, 1917 Olsen, E Danmarks Økonomiske Historie Københavns Universitet, 1962 Rapport fra udvalget om finanskrisens årsager Den Finansielle Krise i Danmark, 2014 Rasmussen, E Kurantbankens Forhold til Staten 1737 – 1773 Københavns Universitet, 1955 Rasmussen, E Kurantbankens Oprettelse Historisk Tidsskrift 11 – 13, 1950–52 Rubow, A Nationalbankens Historie, bd I, 1818 – 1878, and bd II, 1878 – 1907 Nationalbanken i Kiøbenhavn, 1918 (I) and 1920 (II) Ussing, C. Th Staten og Nationalbanken Nationaløkonomisk Tidsskrift, 1914 Ussing, C. Th Nationalbanken 1914 – 1924 Gads Forlag, 1926 Wilcke, J Specie- Kurant- og Rigsbankdaler Møntvæsenets Sammenbrud og Genrejsning 1788 – 1845 Kjøbenhavn, 1929 224 Bibliography Wilcke, J Sølv- og Guldmøntfod 1845 – 1914 Kjøbenhavn, 1930 Økonomiministeriet, et alt Den Danske Pengeinstitutsektor (1994) Økonomiministeriet, et alt Redning af Danske Pengeinstitutter siden 1984 (1995) III Sweden Brisman, S et alt Sveriges Riksbank, I – V Sveriges Riksbank, 1918 – 1930 Dahmén, E (et alt) Upplåning och utveckling Riksgäldskontoret 1789 – 1989 Riksgäldskontoret, 1989 Glete, J Kreugerkoncernen och krisen på svenskt aktiemarknad Almquist & Wicksell, 1981 Heckscher, E The Bank of Sweden in its connection with the Bank of Amsterdam in J.G van Dillen History of the Principal Public Banks F. Cass & Co Ltd, 1964 Hildebrandt, K Riksgäldskontoret 1789 – 1934 – in Sveriges Riksdag, senera avd Riksdagen från 1866, 13 bd 1934 Hildebrandt, K Riksgäldskontoret 1789 – 1939 Stockholm, 1939 Bibliography 225 Kock, K Svenskt bankväsen i våra dagar Kooperativa förbundets bokförlag, 1932 Kock, K Kreditmarknad och räntepolitik, I + II Sveriges Allmänna Hypoteksbank, 1961–62 Larsson, M Aktörer, marknader och regleringer, − Sveriges finansielle system under 1900-tallet Uppsala Papers in Financial History, Report I, 1993 Larsson, M Staten och kapitalet SNS Förlag, 1998 Magnusson, L Sveriges ekonomiska historia Prisma, 1997 Partnoy, F The Matchking Public Affairs, N.Y 2009 Schön, L En modern svensk ekonomisk historia SNS Förlag, 2000 Statistiska Centralbyråen Historisk Statistik Werin, L (ed.) Från räntereglering till inflationsnorm Det finansielle system och Riksbankens Politik 1945 – 1990 SNS Förlag, 1993 226 Bibliography Wetterberg, G Pengarna och Makten Riksbankens Historia Sveriges Riksbank, 2009 Ögren, A (ed.) The Swedish Financial Revolution Palgrave Macmillan, 2010 IV Norway Berg, S.A & Eitrheim, Ø Bank regulation and bank crisis Norges Bank, Working Paper 2009/18 Egge, A Statens diskonteringskommisjoner Finansdepartementet som statsbank i det 19 århundrede Oslo Universitet, 1988 Eitrheim, Ø., Klovland, J.T., & Quigstad, J Historical Monetary Statistics for Norway Norges Bank, Occasional Papers, 2004 Engebretsen, Norsk bankvæsen, særlig etter verdenskrigen Oslo, 1939 Dyrvik, S et alt Norsk økonomisk historie 1500 – 1850 Universitetsforlaget, 1990 Hanisch, T.J et alt Norsk økonomisk politikk i det 20 århundrede Høyskoleforlaget, 1999 Bibliography 227 Hodne, F Norges økonomiske historie 1815 – 1970 Cappelen (Oslo), 1981 Hodne, F & Grytten, O.H Norsk økonomimi det 19 århundrede Fakbokforlaget, 1994 Innstilling fra den penge- og kredittpolitiske komité, 1964 Innstilling fra penge- og finansrådet, 1952 Jahn, G., Eriksen, A & Munthe, P Norges Bank gjennom 150 år Norges Bank, 1966 Johnsen, T et alt Bankkrisen i Norge SNF projekt nr 225 Norges Handelshøyskole & Universitet i Oslo, 1992 Keilhau, W Den norske pengehistorie Oslo, 1952 Matre, H.J Norske kredittinstittusjoner 1850 – 1990 NORAS rapport nr 42 Moe, T.G et alt The Norwegian Banking Crisis Norges Bank, Occasional Papers No 33, 2004 NOU 1980:4 Rentepolitikk NOU 1983:29 Om mål og virkemidler i penge- og kredittpolitikken NOU 1983: 39 Lov om Norges bank- og pengevæsen 228 Bibliography Petersen, K Kredittpolitikken i støpeskjeen A/S Hjemmet-Fagpresseforlaget, 1982 Rapport til Stortinget fra kommisjonen somm ble nedsatt af Stortinget for å gjennomgå ulike Årsaksforhold knyttet til bankkrisen (”Stortingsrapporten”), 1998 Rygg, N Norges Bank i mellomkrigstiden Oslo, 1950 Rygg, N Norges Banks historie Norges Bank, 1954 Skånland, H Det norske kredittmarked siden 1900 Statistisk Sentralbyrå, 1967 Statistisk Sentralbyrå, several publications, incl Historisk statistikk, 1994 Nasjonalregnskabsstatistikk 1965 – 1960 Statistisk Årbok 2009, Finansmarked Index A Act on Norges Bank (1816), 73, 75, 198 Act on the monetary system (Norway, 1816), 73, 198 Adenauer, Konrad, 15 Allernaadigste Octroy for den Kjøbenhavnske Assignations - Vexel og Laanebank, 55n6 Amagerbanken, 180 Amsterdamsche Wisselsbank, the, 27n3, 54n3 Åsbrink, Per, 139, 140 Assembly of the Estates, 26, 35, 38, 54, 89, 121, 122, 206, 212 asset prices, 5, 22, 210 austerity, 40, 43, 44, 60, 123 B bad bank, 179 Bagehot, Walter, 9, 9n6, 18, 18n5, 19, 19n7, 126, 127n10, 152 Banca della Piazza di Rialto, 27 Bank Charter Act of 1844, banking acts Danish, 150, 175n33, 176, 209 Norwegian, 37, 183, 183n8, 190, 192 Swedish, 49, 50, 131 Banking Committee (“Bankutskottet,” Sweden), 41n29, 44, 48, 89, 122, 123, 134, 138 banking crisis/crises, 50, 67, 78, 78n22, 124, 126, 132, 144, 149–53, 179, 180, 184, 185, 195–7, 196n27, 197 © The Editor(s) (if applicable) and The Author(s) 2016 S.E Andersen, The Origins and Nature of Scandinavian Central Banking, Palgrave Macmillan Studies in Banking and Financial Institutions, DOI 10.1007/978-3-319-39750-4 229 230 Index banking supervision, 209 banknotes, 13, 16, 25–30, 35–40, 58, 63–4, 75, 90, 190, 198 Bank of England, the, 4, 9, 12, 13, 13n2, 15, 17, 18, 18n4, 19, 21n9, 47, 48, 55, 113, 127n10, 131, 156, 194, 207, 210 bank package(s) (Denmark), 177–9 bank rescues, 152 Banks of Issue, 15 bankstödsnämnd (Sweden), 143 Banque de France, 12, 48, 194, 207 Basel, 175, 176, 178 Bear Stearns, 18 Bernadotte, Jean-Baptiste (Karl XIV Johan), 70 Bernanke, Ben, bimetallic, bimetallism, 81, 82, 88 Björk, A.W., 122 board of directors (Nationalbanken), 161, 162, 165 board of governors Denmark, 149n1, 161–3, 167 Norway, 193n18, 201 Sweden, 41, 44 board of representatives Nationalbanken, 61–8, 149n1, 159, 161–3, 165, 169 Norges Bank, 165, 200–2 Bomhoff, Karl Gether, 114n26 Bramsnæs, C.V., 154, 156, 163n17, 167 Bretton Woods, 13, 14, 91–2 Brisman, Sven, 7, 27n2, 38, 49n39, 90, 132 Brofoss, Erik, 191 Brüder Benneche (Berlin), 71 Brussels Conference, 1920, 15 bubble(s), 5, 22, 123, 124, 141, 142, 144, 150, 176, 196, 209 Bundesbank, the, 15 C Capital Control Council See Kapitalkontrollnämnd Cassel, Gustav, 116, 117, 117n30, 132, 207 ceiling (on bank lending, Dednmark), 48, 59, 109, 167, 172–4 central banks concept of, 3, 8–11, 64, 97 definition of, 3, 11–22 charter, royal (Denmark), 55, 205 charter, royal (Sweden), 11, 31, 32 Christian Frederik, king of Norway, 69n1, 71 Christiansborg Palace (Copenhagen), 54, 54n4 Christian VI (Denmark), 54 clearing account (Denmark, Norway), 167 Commercial Banking Act of 1911 (Sweden), 49 Commissioner (Sweden) See kommissarier Congress of Vienna, 61, 70 controls, 141, 142, 167, 170, 175, 184, 191, 195 convertibility, 13, 37, 38n25, 39–43, 56, 64, 75–7, 87, 88, 88n12, 90, 98, 99, 103, 110, 155–7, 159, 166, 185 Copenhagen Bank, the, 53–61 copper, 28, 28n5, 29, 32n12, 39, 41, 45, 84, 111, 140 Index 231 Credit Act of 1965 (Norway), 193 Creditiff Zedlar (Sweden), 35n19 credit rationing, 48, 138, 189, 196 Criterion I, 12–13, 35–8, 64, 75, 79, 123, 124, 136, 206 Criterion II, 13–15, 38–44, 64–5, 76, 79, 123, 134, 136, 139, 153, 155, 158, 167, 175, 185, 186, 189, 200, 203, 206 Criterion III, 16–17, 44–5, 66–7, 76–7, 79, 123, 189, 202, 206 Criterion IV, 17–19, 46–51, 67–8, 77–9, 123, 131, 132, 136, 140, 152, 184, 189, 206 currency crisis (Sweden), 144, 145 currency reforms, 44 See also myntrealisation(er) (Sweden) currency union, 8, 10, 14, 39, 81–93, 97, 116, 185, 207–8 See also Latin Currency Union, the; Scandinavian Currency Union, the Davidson, David, 10, 116, 132 Den Danske Landmandsbank, 19n8, 68, 130, 151, 152n4, 153, 153n6 Den Dansk-Norske Speciesbank, 57n10 Den Kjøbenhavnske AssignationsVexel-og Laane bank, 54n1, 55n6 Dennis, Bengt, 140, 144 Den penge- og kreditpolitiske komité af 1960 (Norway), 192 deregulation, 141–5, 174–5, 195–7, 208–9 discount rate, 4, 13, 15, 20, 66, 89, 90, 98, 103, 105, 109, 117, 132, 133, 138, 139, 155–7, 171, 187, 191, 200 diskonterne (discount houses, Sweden), 8, 46 DKK See krone, kroner (Danish) dollars (USD), 13, 92, 129, 140, 201 double gearing, 141 Draghi, Mario, 21n9 Dufwa, A.W, 47 D daler, 32n12, 41, 42, 59, 83, 85 Danmarks Nationalbank, 28, 53–68, 107, 116, 144, 146, 149–80, 194, 206, 208, 209 See also Copenhagen Bank, the; Den Kjøbenhavnske AssignationsVexel-og Laane bank; Kurantbank(en); Nationalbanken i Kjøbenhavn; Rigsbank, the Danske Bank (Den), 68, 153n6, 176 E Eidsvoll, 70, 72, 186 eligible counterparts, 17 enskilda banks, 37, 38, 49, 101 Erlander, Tage, 136 Estates, the (Sweden), 25, 26, 30–8, 40, 54, 89, 121, 122, 147, 206 euro bloc, the, 14, 15, 17 European Central Bank, the (ECB), 5, 14, 15, 21n9, 203, 209, 210 232 Index European Currency Union, the, 14, 92–3 the European exchange rate mechanism (ERM), 144 euro, the, 14, 15, 97, 174, 201, 207, 209 EU, the, 025, 144–8, 166, 178, 179, 209, 26137 Exchange bank, 32–4 Exchange Conference, the (Denmark), 153, 154, 154n8 Exchange Council (“Valutarådet,” Norway), 182, 185 Exchange Equalization Fund (Denmark), 154 external value, 13, 14, 28, 30, 76, 102, 108, 114, 153, 185, 199, 201 F Federal Reserve, 4, 14 Feldt, Kjell-Oluf, 142, 142n31 finance companies, 141, 142 Finansiel Stabilitet (Denmark), 179 finansråd (Norway), 114, 114n26, 140, 192 Finland, 6n3, 7, 70, 84, 97, 180, 208 Fish, fishing, 71, 97, 109–11, 113, 117, 181, 183, 201 Fish Purchase Agreement (Norwegian), 110, 111 Folketing, the (Denmark), 175, 177 foreign debts, 90, 95, 96, 100n1, 100n2, 108, 109, 172, 173, 176, 190 foreign exchange, 13, 76, 99n6, 102, 105, 107–9, 113, 114n26, 138, 144, 145, 149, 150, 155–9, 164, 166–8, 170–4, 176, 178, 182, 198, 200, 208, 214 foreign exchange reserves, 13, 105, 107, 158, 166–8, 170, 172, 176, 208 foreign exchange shortage, 150, 156–8, 170–4 Four Criteria, the, 11–20, 25–51, 53–79, 96, 121–203 Four Estates, the (Sweden), 25, 35, 40 Frederik VI (Denmark), 62, 69n1, 162 Friedman, Milton, 4, Frihetstiden (“period of liberty”), Sweden, 26 Frisch, Ragnar, 191, 191n15, 192 fullmägtige, bankfullmägtge (Sweden), 33, 35, 36, 39, 41, 44–6, 89, 121–3, 135, 138, 144, 146–8, 206 G gold, 8, 10, 13, 32, 32n12, 36, 38, 39, 43, 76, 81–5, 85n7, 86–9, 89n15, 90, 91, 91n18, 98, 99, 102–5, 107–10, 113, 114n26, 115–17, 127, 131, 133, 144, 150, 153, 155–7, 167, 167n22, 185, 186, 189, 190, 194, 194n23, 197, 208 Index gold standard, the, 8, 10, 39, 83, 91n18, 127, 131, 133, 150, 153, 156, 157, 185, 186, 197 governance, 117, 121–3, 132, 159, 161, 163, 197, 206 governor(s), v, vi, vii, 15, 20, 21, 21n9, 41, 41n28, 44, 47, 55, 65, 66n28, 69, 69n1, 74, 75, 83, 89, 101, 103n8, 105n10, 105n11, 110, 114n26, 116, 132–4, 134n21, 138, 140, 147, 148, 149n1, 152–4, 156, 158, 159, 161–3, 163n17, 165n19, 166, 167, 171, 173, 182, 185, 191, 193, 193n18, 193n19, 197, 199–203, 206 Great War, the, vi, 10, 19, 45, 47, 66, 68, 77, 91, 92, 95–117, 123, 136, 137, 188, 189, 205, 207, 208, 210 Greenspan, Alan, 5, 5n1 guidance, forward, 21, 22 Gustav III, 26, 34, 41 H Haavelmo, Trygve, 191 Hambros Bank, 48 Hamburg, 6, 41, 48, 57–9, 71, 82, 89, 99 Hamburg banco, 41, 58, 59, 71 Hamburgische Bank, 27, 33n13, 54n3, 82 Heckscher, Eli, 28n6, 132, 135 Heinesen, Knud, 173, 173n29 Hoffmeyer, Erik, 164n18, 173 hovedstyre (Norway), 201, 202, 206 233 I IBRD, 92 IMF, 92, 140 inflation, vi, 4, 5, 14, 15, 100–2, 108, 114, 116, 123, 128, 133, 134, 138, 139, 141, 142, 149, 158, 166, 171, 172, 174, 175, 187, 199, 209, 210 Ingves, Stefan, 140, 143, 143n33 insurance companies (Norway, Sweden), 95, 183, 193, 196 Interest Act (Norway), 187 internal value(s), 14, 15, 194, 201 Ireland, 176 J Jahn, Gunnar, 71n5, 71n6, 73n12, 76n16, 76n17, 78n20, 85n6, 110n19, 112, 113n23, 114n25, 116, 181n1, 182n3, 182n4, 184n9, 185n10, 190n13, 193, 193n19, 194n20, 194n22, 195n24 joint stock banks, 8, 49, 49n41 K Kapitalkontrollnämnd, 101, 137 Karl XII, 26, 26n1, 32n12, 36n20, 39 Karolinska tiden (Sweden), 26, 30 Kiel peace treaty (Denmark), 70 King, Mervin, 21n9 Kommissarier, 44, 121, 147, 148 Kreditkassan AB av År 1922, 125 234 Index Kreuger, Ivar the Kreuger affair, 124, 127–31 Krona, kronor (Sweden), 38, 98–100, 102, 133, 134, 134n19, 144, 145 krone, kroner (Danish), 115, 172 Krone, kroner (Denmark, Norway), 84n2, 85n7, 88, 88n13, 104, 153–6, 172, 174, 185, 186, 199–201 Krone, kroner (Norwegian), 185, 186, 199–201 Kurantbank(en), 55–9, 61–3, 66, 70, 75, 160, 164, 206 See also Danmarks Nationalbank; Nationalbanken i Kjøbenhavn L Lähnebank, loan bank (Sweden), 33 Landmandsbanken See Danske Bank (Den); Den Danske Landmandsbank Latin Currency Union, the, 8, 82, 86–91, 97 Law, John, 36, 87 Lehman Brothers, 18, 127, 177, 178 lender of last resort, 9n5, 17, 19, 46, 48, 50, 67, 78, 126, 130, 183, 197 Liljencrants, Johan, 41 liquidity guarantee (Denmark), 177 Lov om Danmarks Nationalbank (1936), 159n15 Lov om Norges Bank og pengevesen (”Sentralbankloven”), 1985, 75n15 Lov on adgang til regulering af pengeog kredittforholdene af 25 juni, 1965 (Norway), 192n16 M Maastricht Treaty, 145 Malling, Ove, 60 Marshall aid, 170 metal coverage, 63, 104 Mint Convention (Scandinavian), 83–7, 92 Moll, Victor, 133, 134 monetarism, monetary easing, 15, 134, 203 monetary economy, monetary policy, 4, 20, 21, 48, 89, 97, 123, 131–3, 135, 146–8, 162–4, 200, 207 monetization, 6, Morgan, J.P., 47 Mynt placater (Sweden), 29, 32 myntrealisation(er) (Sweden), 36, 38, 38n26, 39, 40, 42 Myrdal, Gunnar, 135, 137 N Napoleonic wars, 8, 46, 62, 70 Nationalbank(en), v, vi, 28, 48, 53–68, 75, 82, 97, 144, 149–80, 194, 206, See also Danmarks Nationalbank; Nationalbanken i Kjøbenhavn Nationalbanken i Kjøbenhavn, 60n18, 75, 90, 103–8, 117n31, 160, 165 Index nationalization, 138, 159, 191–5 neutrality, neutral, vi, 10, 96, 97, 101, 103, 175 Nielsen, Axel, 54n3, 116, 117, 207 NOK See Krone, kroner (Norwegian) non-prioritized lending, 138 Nordea, 126n7, 143n32, 144, 180, 197, 209, 687 Norges Bank, vii, 12, 15, 57n10, 69–79, 85, 165, 181–203, 205, Norges Bank Act, the (of 1816, 1892, and 1985), 75, 184, 197–203 Norman, Montague, 156 Northern Rock, 18, 176 note circulation, 37, 39, 72, 101, 108, 113, 114, 168, 169, 183, 189 note-issuing banks, 46, 82, 85–7, 90, 92, 96–8, 208 note-issuing rights, 12, 49, 49n41, 131 notes, banknotes, 7–9, 12, 13, 15, 16, 25–30, 35–40, 42, 43, 45, 49, 55–9, 62–4, 70, 72, 75, 85–7, 90, 98, 102–4, 164, 169, 185, 190, 198, 208 O occupation account, 190, 194 optimum currency area, 83 Oscar II, 48 Oslo school, 191, 193 Overend, Gurney & Co, 17, 18 235 P Palme, Oluf, 136, 142, 145 Palmstruch, Johan, 27–30, 30n7, 31, 33, 35, 39 Penge- og bankkomitéen af 1950 (Norway), 192 Penge- og finansrådet af 1945 (Norway), 192 Penge- og valutakommisjon af 1932 (Norway), 186 PK banken, 132, 143 planned economy, 22, 138, 140, 191, 192, 199 policy rate(s), 20 pound sterling (GBP), 83, 154, 155n10, 158, 201 prioritized bonds, 137, 138 Privatbanken i Kjøbenhavn, 67, 152n4 Provianteringskommisjon (Norway), 109 Provianteringslånet (Norway), 112 purchasing power, 133, 134, 170 Q quantitative easing, R rationing, 48, 100, 138, 155, 156–8, 170, 189, 196 rediscounting, 46, 49, 66, 78, 101, 103, 109, 111 Reichbank, 82, 104–6, 113, 168 reichmarks, 83, 99 repræsentantskab (Denmark), 161 representantskab (Norway), 201 236 Index restrictions, 141, 154, 157, 167, 167n22, 169–2, 174, 191, 208 Retriva, 143, 144 Rigsbank, the, 59–61, 61n19, 62, 62n20, 63, 66, 70, 72, 75, 160 See also Danmarks Nationalbank; Kurantbank(en); Nationalbanken i Kjøbenhavn Rigsdag (Danmark), 103, 154, 159, 161, 169 Riksbank Act, of 1897, 1988, and 1999, 35, 37, 38, 49, 50, 122, 123, 145–8, 206 riksbankchef, 35, 47, 122, 132, 138–40, 143n33, 144, 146, 147, 163, 206 Riksbank, the, 7, 25–51, 60, 61, 63, 64, 66, 72, 76, 85, 86, 89, 90, 95n1, 98–102, 104, 115, 116, 121–48, 164, 171, 206, 207, 209, 210 See also Stockholms Banco; Sveriges Rijkes Ständers Bank; Sveriges Riksbank Riksdag (Sweden), 26, 31, 34–6, 39–41, 41n29, 42–5, 45n33, 46–50, 89, 98, 99, 101n6, 102, 104, 122, 123, 132–5, 137, 137n25, 138, 145n37, 146–8, 159, 206 riksdaler species, 41 Riksgäldskontor, the, 26, 36, 36n20, 42–5, 45n33, 46, 48, 95n1, 100, 100n5, 101, 101n6, 102, 126, 130, 144, 206 Roskilde Bank, 176 Roth, Ivar, 134, 134n21 royal bank commissioner (“Kgl Bankkommisær”), Denmark, 163, 164, 169, 171 Royal Bank of Scotland, 13n2, 18 Royal Mint(s), 85, 93 Russia, 28, 70, 99 Rygg, Nicolai, 86n8, 108n14, 109n17, 110n18–21, 113n23–4, 114n26, 114n28, 115, 182, 185 S samarbeidsnemnd (Norway), 193 Savingsbanks, 187 Scandinavian Currency Union, the, 10, 39, 81–93, 97, 116, 185, 207–8 Scandinavian Mint Convention, the, 84 Schimmelman, Ernst Heinrich, 57, 59 Schimmelman, Karl Heinrich, 57 Securum, 143, 144 SEK See Krona, kronor (Sweden) silver, 8, 13, 28, 29, 32n12, 36, 37, 39–41, 41n29, 42, 43, 48, 56, 57n10, 58, 59, 62, 64, 71–7, 81, 82, 84, 85, 87, 88, 88n12, 99, 208 Skandinaviska Banken, 37n22, 125, 131n15 See also Skandinaviska Enskilda Bank (SEB) Index Skandinaviska Enskilda Bank (SEB), 37n22, 99n3, 126n9, 131n15 See also Skandinaviska Banken; Stockholms Enskilde Bank Skandinaviska Kredit AB, 49, 126, 130, 131n15 See also Skandinaviska Enskilda Bank (SEB) stability pact, 92 state banks (“statsbanker”), 77, 78, 183, 187, 188, 192, 193, 196, 197 Stockholms Banco, 25–31, 54n3, 56, 160, 206 Stockholms Enskilde Bank, 126 Stortinget, 72n8, 76n16 Svenska Handelsbanken (Stockholms Handelsbank), 124, 125 Sveriges Rijkes Ständers Bank, 34n17, 35 See also Riksbank; Stockholms Banco; Sveriges Riksbank Sveriges Riksbank, 7, 25–51, 76, 85, 86, 90, 95, 98–102, 104, 115, 121–48, 171, 194, 206, 207, 209, 210 Sydsvenska Kredit AB, 125 237 T target rate of inflation, 4, 14, 174, 199, 209, 210 U USD See dollars Ussing, Carl Th., 66n28, 105n10, 106n12, 149, 153 V Valutacentral, 155 Valutarådet, 182 Vasa, Gustav, 25 W Wallenberg, 47, 48, 108n16, 124n3, 139 Warburg, M.M., 99 war commissions (Sweden), 100, 102 Wechselbank, 33, 40 Wicksell, Knut, 116, 128, 130n13, 133, 133n18, 207 Wigforss, Ernst, 137 World War II (W W II), 91–3 ... more Note issuance by the Bank of Scotland and the Royal Bank of Scotland is strictly controlled by the Bank of England 14 The Origins and Nature of Scandinavian Central Banking problematic It... of the main points on origins and nature of the Scandinavian central banks 116 124 128 143 150 169 196 206 Part I The Nature of Central Banking Some General Remarks on  Central Banking 1.1 The. .. II: Being the Guardian of the Value of the Country’s Currency In the days of the silver and/ or gold standard, and even under the standards of the Bretton Woods system, defining the value of a country’s