The Bank of Isabella II () was a financial institution in

Spain Spain, or the Kingdom of Spain, is a country in Southern Europe, Southern and Western Europe with territories in North Africa. Featuring the Punta de Tarifa, southernmost point of continental Europe, it is the largest country in Southern Eur ...

, created by a Royal Decree of 25 January 1844Teodora Gómez Herrero, ''Diccionario-guía legislativo español: comprende todas las disposiciones legales que se han publicado durante el presente siglo xix, presentadas dentro de un orden y clasificación por artículos, de tal forma enunciados...'', Volume 1, Part 1, R. Fé, 1902. p. 172
Available online
at

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. as a bank that, together with the

Bank of San Fernando The Bank of San Fernando ( or ''Banco Español de San Fernando'') was a financial institution created in Spain in 1829Gabriel Tortella, "Spanish Banking History, 1782 to the Present" 865:874 in Manfred Pohl, Sabine Freitag, European Association for ...

, began the process of establishing a Spanish banking apparatus adequate for

industrialization Industrialisation (British English, UK) American and British English spelling differences, or industrialization (American English, US) is the period of social and economic change that transforms a human group from an agrarian society into an i ...

and the transformation from

feudalism Feudalism, also known as the feudal system, was a combination of legal, economic, military, cultural, and political customs that flourished in Middle Ages, medieval Europe from the 9th to 15th centuries. Broadly defined, it was a way of struc ...

capitalism Capitalism is an economic system based on the private ownership of the means of production and their use for the purpose of obtaining profit. This socioeconomic system has developed historically through several stages and is defined by ...

. Although not officially a

bank of issue A bank of issue, also referred to as a note-issuing bank or issuing authority, is a financial institution that issues banknotes. The short-lived Stockholms Banco (1657-1667) printed notes from 1661 onwards and is generally viewed as the first-ev ...

, it issued bonds that "were

banknotes A banknote or bank notealso called a bill (North American English) or simply a noteis a type of paper money that is made and distributed ("issued") by a bank of issue, payable to the bearer on demand. Banknotes were originally issued by commer ...

in all but name."Gabriel Tortella, "Spanish Banking History, 1782 to the Present" 865:874 in Manfred Pohl, Sabine Freitag, European Association for Banking History, ''Handbook on the history of European banks'', Elgar Original Reference Series, Edward Elgar Publishing, 1994, . p. 866–867
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on

. 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 José is a predominantly Spanish and Portuguese form of the given name Joseph. While spelled alike, this name is pronounced very differently in each of the two languages: Spanish ; Portuguese (or ). In French, the name ''José'', pronounced , ...

, Nazario Carriquiri, Alejandro Aguado,

Gaspar Remisa Gaspar is a given and/or surname of French, German, Portuguese, and Spanish origin, cognate to Casper (given name) or Casper (surname). It is a name of christian origin, per Saint Gaspar, one of the three wise men mentioned in the Armenian I ...

José Buschenthal José is a predominantly Spanish and Portuguese form of the given name Joseph. While spelled alike, this name is pronounced very differently in each of the two languages: Spanish ; Portuguese (or ). In French, the name ''José'', pronounced , ...

, and Domingo de Norzagaray. The bank had initial capital of 100 million reales in

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and

credit Credit (from Latin verb ''credit'', meaning "one believes") is the trust which allows one party to provide money or resources to another party wherein the second party does not reimburse the first party immediately (thereby generating a debt) ...

s. It made generous loans to industrial and mining enterprises, but also to prominent members of the Spanish royal family such as the

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and former

regent In a monarchy, a regent () is a person appointed to govern a state because the actual monarch is a minor, absent, incapacitated or unable to discharge their powers and duties, or the throne is vacant and a new monarch has not yet been dete ...

Maria Christina of the Two Sicilies Maria Christina of the Two Sicilies (, ; 27 April 1806 – 22 August 1878) was the queen consort of Spain, Queen of Spain from 1829 to 1833 and Queen regent of the kingdom from 1833, when her daughter became queen at age two, to 1840. By virtue ...

and her husband, both of whom speculated heavily in

railway Rail transport (also known as train transport) is a means of transport using wheeled vehicles running in railway track, tracks, which usually consist of two parallel steel railway track, rails. Rail transport is one of the two primary means of ...

s. It favored the

Moderate Moderate is an ideological category which entails centrist views on a liberal-conservative spectrum. It may also designate a rejection of radical or extreme views, especially in regard to politics and religion. Political position Canad ...

governments of General

Ramón María Narváez Ramón María Narváez y Campos, 1st Duke of Valencia (5 August 180023 April 1868) was a Spanish general and statesman who served as Prime Minister of Spain, Prime Minister on several occasions during the Reign of Isabella II of Spain, reign of ...

. It bought shares of other

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and

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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 A ministry of finance is a ministry or other government agency in charge of government finance, fiscal policy, and financial regulation. It is headed by a finance minister, an executive or cabinet position . A ministry of finance's portfolio ...

merged it with the much healthier

, 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 The Bank of Spain (, ) is the national central bank for Spain within the Eurosystem. It was the Spanish central bank from 1874 to 1998, issuing the peseta. Since 2014, it has also been Spain's national competent authority within European Banki ...

.History of a Central Bank
, Banco de España, p. 6 (p. 8 of PDF). Retrieved 2010-03-03.
, Banco de España. Retrieved 2010-03-04.

Notes

{{DEFAULTSORT:Bank Of Isabella Ii Defunct banks of Spain