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Equity short-term finance under Philip II, with an option to long-term funded debt

Author

Listed:
  • Carlos álvarez-Nogal

    (Universidad Carlos III, Madrid)

  • Christophe Chamley

    (Boston University)

Abstract

Men of finance raised funds for loans, asientos, to Philip II by trading short-term financial instruments in credit markets and by selling long-term annuities, juros. These activities are illustrated by an asiento with the Maluenda brothers (July 13, 1595), where short-term credit secured by the equity of the fleets from the Indies were, for more than one half, converted into funded life annuities that were sold by the Maluendas. The new analysis of this asiento relies on its dossier of more than 400 pages in the archives of Simancas, including the contract, the monitoring attachments, and the final audit.

Suggested Citation

  • Carlos álvarez-Nogal & Christophe Chamley, 2015. "Equity short-term finance under Philip II, with an option to long-term funded debt," Working Papers 0079, European Historical Economics Society (EHES).
    • Handle: RePEc:hes:wpaper:0079
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    References listed on IDEAS

    as
    1. Carlos Álvarez-Nogal & Christophe Chamley, 2014. "Debt policy under constraints: Philip II, the Cortes, and Genoese bankers," Economic History Review, Economic History Society, vol. 67(1), pages 192-213, February.
    2. Chamley, Christophe, 2011. "Interest Reductions in the Politico-Financial Nexus of Eighteenth-Century England," The Journal of Economic History, Cambridge University Press, vol. 71(3), pages 555-589, September.
    3. Christophe Chamley, 2011. "Interest Reductions in the Politico-Financial Nexus of 18th Century England," Post-Print halshs-00754521, HAL.
    4. Drelichman, Mauricio & Voth, Hans-Joachim, 2011. "Serial defaults, serial profits: Returns to sovereign lending in Habsburg Spain, 1566-1600," Explorations in Economic History, Elsevier, vol. 48(1), pages 1-19, January.
    5. Mauricio Drelichman & Joachim Voth, 2006. "The sustainable debts of Philip II: A reconstruction of Castile's fiscal position, 1566-1596," Economics Working Papers 1121, Department of Economics and Business, Universitat Pompeu Fabra, revised May 2009.
    6. Christophe Chamley, 2011. "Interest Reductions in the Politico-Financial Nexus of 18th Century England," PSE-Ecole d'économie de Paris (Postprint) halshs-00754521, HAL.
    7. Drelichman, Mauricio & Voth, Hans-Joachim, 2010. "The Sustainable Debts of Philip II: A Reconstruction of Castile's Fiscal Position, 1566–1596," The Journal of Economic History, Cambridge University Press, vol. 70(4), pages 813-842, December.
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    Cited by:

    1. Carlos Álvarez‐Nogal & Christophe Chamley, 2018. "Refinancing short‐term debt with a fixed monthly interest rate into funded juros under Philip II: an asiento with the Maluenda brothers," Economic History Review, Economic History Society, vol. 71(4), pages 1100-1117, November.

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    More about this item

    Keywords

    public finances; Philip II; asientos; juros; methodology; archives; verification;
    All these keywords.

    JEL classification:

    • N01 - Economic History - - General - - - Development of the Discipline: Historiographical; Sources and Methods
    • N13 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: Pre-1913
    • N23 - Economic History - - Financial Markets and Institutions - - - Europe: Pre-1913
    • N43 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Europe: Pre-1913

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