Absolutism, Mercantilism and Banking Revolutions

From the Italian City-States banking spread to other parts of Europe. Italian bankers brought banking to many European cities, where they founded banks as branches of their Italian banks (Kohn 1999b; Bogaert et al. 1994). The first non-Italian banks emerged in autonomous cities and Hanseatic centers: banks were founded in Bruges, London, Lubeck, and several other Hanseatic cities (see Kohn 1999b; North 2013). However, it was South-German cities that became Europe’s new banking hotspot (Kindleberger 1993, p. 46 f.). Located between the Mediterranean South and the Hanseatic North-, South-German cities were ideal trading places. In South-German trading hubs, like in Nuremberg, Augsburg, and Regensburg, trade-based banks were founded. Most private banks were founded and owned by merchants, haulers, shippers, goldsmiths, and jewelers: those crafts were highly profitable and included wide networks and good market overviews. However, the foundation of the big national banks, like the Bank of England, the Banque Royale in France and later the Giro- and Lehnbanco in Prussia, were banking revolutions which significantly shifted the historical development of the European banking sector.