Bank of France
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|Established||18 January 1800|
|Governor||François Villeroy de Galhau|
|Central bank of||France|
|Preceded by||Banque Royale|
|Succeeded by||European Central Bank (1999)1|
|1 The Bank of France still exists but many functions have been taken over by the ECB.|
The Bank of France known in French as the Banque de France, headquartered in Paris, is the central bank of France; it is linked to the European Central Bank (ECB). In 1716 the Banque Générale was created by Scottish economist John Law following a crash in 1721 it later received its modern name in 1800, it helped resolve the financial crisis of 1848 and emerged as a powerful central bank. Its main charge is to implement the interest rate policy of the European System of Central Banks (ESCB).
In 1800, financial power in France was in the hands of about ten to fifteen banking houses whose founders, in most cases, came from Switzerland in the second half of the eighteenth century. These bankers, mostly Protestant, were deeply involved in the agitations leading up to the French Revolution. When the revolutionary violence got out of hand, they orchestrated the rise of Napoleon, whom they regarded as the restorer of order. As a reward for their support, Napoleon, in 1800, gave the bankers a monopoly over French finance by giving them control of the new Bank of France. Banker Claude Périer drafted the first statutes and Emmanuel Crétet was the first governor. For the first fifteen years it was the sole issuer of bank notes in Paris, and this privilege was extended to other financially important cities and the rest of the country by 1848.
Linkage with the ESCB
On 1 June 1998, a new institution was created, the European Central Bank (ECB), charged with steering the single monetary policy for the euro. The body formed by the ECB, and the national central banks (NCB) of all the member states of the European Union, constitute the European System of Central Banks (ESCB).
The ESCB is an institutional framework of a single monetary policy for the euro. According to the Bank of France's website, the "sharing of responsibilities between the ECB and the NCBs is based upon significant decentralization of the conduct of the ESCB's single monetary policy".
- 1716 John Law opens the Banque Générale
- 1718 The Banque Générale is acquired by the government and renamed Banque Royale
- 1721 The bubble crashes and its chief executive flees for his life
- 1800 Creation of the Bank of France by Napoleon Bonaparte
- 14 April 1803, the new Bank received its first official charter granting it the exclusive right to issue paper money in Paris for fifteen years.
- 22 April 1806, a new law replaced the Central Committee with a Governor and two Deputy Governors. All three were appointed by the Emperor.
- Decree dated 16 January 1808 set out the "Basic Statutes", which were to govern the Bank's operations until 1936.
- Decree on 6 March 1808 authorized the Bank to purchase the former mansion of the Count of Toulouse in the rue de la Vrillière in Paris for its headquarters.
- 1808–1936 The Bank's notes became legal tender; expansion of the branch network
- 1936–1945 Nationalisation
- 1973 Rewriting of the Bank's statutes
- 1993 A landmark reform granted the Bank independence, in order to ensure price stability, regardless of domestic politics. This reform cleared the path for the European monetary union.
- 1998 Entered into the European System of Central Banks
In 2010, the French government's Autorité de la concurrence (the department in charge of regulating competition) fined eleven banks, including Bank of France, the sum of €384,900,000 for colluding to charge unjustified fees on check processing, especially for extra fees charged during the transition from paper check transfer to "Exchanges Check-Image" electronic transfer.
- Standford, Rives (18 December 2010). "John Law: Paper Currency Experiment 1716-1719". standfordrives. Retrieved 21 February 2018.
- Quigley, Carroll (1966). Tragedy And Hope. New York: Macmillan. p. 515. ISBN 0-945001-10-X.
- Bank of France, Encyclopædia Britannica
- Graeber, David (2011). Debt: The First 5000 Years. Brooklyn, NY: Melville House. p. 342. ISBN 978-1-933633-86-2.
- Collusion in the banking sector, Press Release of Autorité de la concurrence, République Française, 20 September 2010, retrv 20 September 2010
- 3rd UPDATE: French Watchdog Fines 11 Banks For Fee Cartel , Elena Bertson, Dow Jones News Wires / Wall Street Journal online, retr 20 September 2010
- Bouvier, Jean. "The Banque de France and the State from 1850 to the Present Day." in Fausto Vicarelli, et al. eds., Central banks' independence in historical perspective (Walter de Gruyter, 1988) pp 73–104.
- Jacoud, Gilles. "Crises et Apprentissage: La Banque de France en 1848," Entreprises et Histoire (Dec. 2012) Issue 69, pp 27–37
- Plessis, Alain. "The history of banks in France." in Pohl, Manfred, and Sabine Freitag, eds. Handbook on the history of European banks (Edward Elgar Publishing, 1994) pp: 185-296. online
- (in French) (in English) Official site of Bank of France
- (in French) Beginnings of Banque de France The directors of Bank of France between 1800 and 1815.