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The Stupendous Modernity of the First Government Loan for Institutionals in 1555

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  • Georges Gallais-Hamonno

Abstract

In order to finance the Italian war, Henry II ‘financial advisers have made in 1555 an enormous financial operation in LYON – then the French financial capital: a huge debt consolidation plus a cash issue. This issue was outstandingly “modern” by at least three aspects. 1. The subscription was reserved to the institutional investors --- the merchant-bankers. 2. For the first time, the amortization took the form of a 41-quarterly –constant-annuities system. 3. Because of a huge demand, an incredible system of “assimilation” of new loans has been organized. The end of this loan is as stupendous as its technics: less than two years later, the Royal government defaulted and only 9% of the total issue has been repaid according to schedule.

Suggested Citation

  • Georges Gallais-Hamonno, 2009. "The Stupendous Modernity of the First Government Loan for Institutionals in 1555," Working Papers CEB 09-039.RS, ULB -- Universite Libre de Bruxelles.
  • Handle: RePEc:sol:wpaper:09-039
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    More about this item

    Keywords

    Government loans of 1555; Amortization and assimilation technics; Government bankruptcy;

    JEL classification:

    • G00 - Financial Economics - - General - - - General
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
    • N23 - Economic History - - Financial Markets and Institutions - - - Europe: Pre-1913

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