The Bank of Isabella II ( es, Banco de Isabel II) was a financial institution in

Spain , image_flag = Bandera de España.svg , image_coat = Escudo de España (mazonado).svg , national_motto = ''Plus ultra'' (Latin)(English: "Further Beyond") , national_anthem = (English: "Royal March") , i ...

, 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 ( es, Banco de 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, ...

, began the process of establishing a Spanish banking apparatus adequate for industrialization and the transformation from

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

capitalism Capitalism is an economic system based on the private ownership of the means of production and their operation for profit. Central characteristics of capitalism include capital accumulation, competitive markets, price system, priva ...

. Although not officially a

bank of issue A central bank, reserve bank, or monetary authority is an institution that manages the currency and monetary policy of a country or monetary union, and oversees their commercial banking system. In contrast to a commercial bank, a central ba ...

, it issued bonds that "were

banknotes A banknote—also called a bill (North American English), paper money, or simply a note—is a type of negotiable promissory note, made by a bank or other licensed authority, payable to the bearer on demand. Banknotes were originally issued ...

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
Available
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, Nazario Carriquiri, Alejandro Aguado, Gaspar Remisa, José Buschenthal, and Domingo de Norzagaray. The bank had initial capital of 100 million reales in shares 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

queen mother A queen mother is a former queen, often a queen dowager, who is the mother of the monarch, reigning monarch. The term has been used in English since the early 1560s. It arises in hereditary monarchy, hereditary monarchies in Europe and is also u ...

and former

regent A regent (from Latin : ruling, governing) is a person appointed to govern a state '' pro tempore'' (Latin: 'for the time being') because the monarch is a minor, absent, incapacitated or unable to discharge the powers and duties of the monarchy ...

Maria Christina of the Two Sicilies Maria Christina of the Two Sicilies ( it, Maria Cristina Ferdinanda di Borbone, Principessa delle Due Sicilie, es, link=no, María Cristina de Borbón, Princesa de las Dos Sicilias; 27 April 1806 – 22 August 1878) was Queen of Spain from 182 ...

and her husband, both of whom speculated heavily in

railway Rail transport (also known as train transport) is a means of transport that transfers passengers and goods on wheeled vehicles running on rails, which are incorporated in tracks. In contrast to road transport, where the vehicles run on a pre ...

s. It favored the

Moderate Moderate is an ideological category which designates a rejection of radical or extreme views, especially in regard to politics and religion. A moderate is considered someone occupying any mainstream position avoiding extreme views. In American ...

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 on several occasions during the reign of Isabella II. He was also known in Spain as ''El Espad� ...

. It bought shares of other French 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 finance minister is an executive or cabinet position in charge of one or more of government finances, economic policy and financial regulation. A finance minister's portfolio has a large variety of names around the world, such as "treasury", " ...

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.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