Hamburger Bank: Roman law of deposit fulfilled?

[William Meyer]

We've talked a lot about the bank of amsterdam before but there was another famous full reserve bank - hamburger bank or bank of hamburg.

https://en.wikipedia.org/wiki/Bank_of_Hamburg

It had a full reserve payment arm or girobank and a lending arm against good collateral.  Loans to government were never large as hamburg was a hanseatic city which meant no ruling prince elector or army to fund.  Did girobank call money ever fund loans?  Hard to say definitively but doesn't look like it to any large degree.  It was so respected it even survived its vaults being emptied by marshal of France Louis Davout.  It only closed operations on bismark's order upon German unification.  The perfect full reserve bank?

[Joe Leote]

40 page paper describes economic boom as systemic balance sheet expansion (leverage) and bust as fire sale of collateral assets:

LIQUIDITY AND CONTAGION: THE CRISIS OF 1763

Crisis Chronicles: The Commercial Credit Crisis of 1763 and Today’s Tri-Party Repo Market - Liberty Street Economics

The 1763 financial crisis hit the cities of Amsterdam, Hamburg, and Berlin. So far, only skimming the 40-page paper, I don't see mention of the role of the more stable Bank of Hamburg.

Joe

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[William Meyer]

The bank of amsterdam was already insolvent but most people didn't know it yet.  Those with bank deposits that weren't directly redeemable (coin deposits and or bullion deposits that had lapsed) were most likely already purchasing bullion redemption receipts to withdraw metals and then spirit them away to hamburger or boe.  This must have happened over some decades so as not cause a general panic - and already likely happening by 1763.

The fact that the French didn't raid the hamburger bank vaults before 1813 demonstrates that the credit it facilitated (indirectly) was of significance even during times of stress.  The amsterdam bank by then was in total ruin.  Even the boe had suspended redemption and would not resume until 1821.  You might say that even under occupation, hamburger bank was the soundest bank in the world.

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