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The Failure Of The First Romanian Central Bank: Bad Design, Bad Luck, Or Both?


  • Tudor Gherasim SMIRNA

    () (Economics and International Affairs Doctoral School, Bucharest University of Economic Studies, Romania)


In this paper we will analyze the failure of the National Bank of Moldavia, a bank that was chartered by the Principality of Moldavia in 1856, to act primarily as a privileged source of liquidity for its economy. Although the project of a state chartered, privileged bank was planned many years in advance by the princes of the Romanian Principalities, the National Bank of Moldavia suspended payments shortly after its establishment, in early 1858, and had its charter revoked. We will discuss, from the point of view of modern monetary thought, the ideas that were advanced in the justification of its creation, and in the rationalization of is failure. We will analyze the structure of the credits and other problems in its balance sheet. Also, we will study the role that the Crisis of 1857, and the already emerging European economic integration, had in its demise.

Suggested Citation

  • Tudor Gherasim SMIRNA, 2015. "The Failure Of The First Romanian Central Bank: Bad Design, Bad Luck, Or Both?," CES Working Papers, Centre for European Studies, Alexandru Ioan Cuza University, vol. 7(2a), pages 627-636, September.
  • Handle: RePEc:jes:wpaper:y:2015:v:7:i:2a:p:627-636

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    References listed on IDEAS

    1. J. R. T. Hughes, 1956. "The Commercial Crisis Of 1857," Oxford Economic Papers, Oxford University Press, vol. 8(2), pages 194-222.
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    Cited by:

    1. Tudor Gherasim Smirna, 2016. "Victor Place As Early Advocate Of Fractional Reserve Central Banking In Romania," Review of Social and Economic Issues, Romanian-American University, vol. 1(3), pages 57-75, march.

    More about this item


    central banking; international relations; government policy; crisis;

    JEL classification:

    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • F54 - International Economics - - International Relations, National Security, and International Political Economy - - - Colonialism; Imperialism; Postcolonialism
    • G01 - Financial Economics - - General - - - Financial Crises
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • N23 - Economic History - - Financial Markets and Institutions - - - Europe: Pre-1913


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