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Amsterdam and London as financial centers in the eighteenth century1

Published online by Cambridge University Press:  01 February 2011

Ann M. Carlos  and
Larry Neal
Ann M. Carlos
Affiliation:
University of Colorado at Boulder and University College Dublin, ann.carlos@colorado.edu
Larry Neal
Affiliation:
University of Illinois at Urbana-Champaign and London School of Economics, L.Neal@lse.ac.uk
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Abstract

In the seventeenth century, Amsterdam and London developed distinctive innovations in finance through both banks and markets that facilitated the growth of trade in each city. In the eighteenth century, a symbiotic relation developed that led to bank-oriented finance in Amsterdam cooperating with market-oriented finance in London. The relationship that emerged allowed each to rise to unprecedented dominance in Europe, while the respective financial innovations in each city provided the means for the continued expansion of European trade, both within Europe and with the rest of the world. The increasing strains of war finance for the competing European powers over the course of the eighteenth century stimulated fresh financial innovations in each city that initially reinforced the symbiosis of the two centers. The external shocks arising from revolutionary movements in America and France, however, interrupted the relationship long enough to leave London as the supreme financial center.

Keywords

Bank of AmsterdamBank of Englandfinancial innovationscapital marketsbankingmonetary regimes

JEL classification

N20: General, International, or Comparative N23: Europe: Pre-1913
Type
Articles
Information
Financial History Review , Volume 18 , Issue 1 , April 2011 , pp. 21 - 46
Copyright
Copyright © European Association for Banking and Financial History e.V. 2011

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