The banker's banker: Hope &amp; Co. and the credit crisis of 1772-1773

In this thesis, I examine the interaction between the business strategy of the Amsterdam banking house Hope & Co. from 1756-1780 and the credit crisis of 1772-1773. Hope & Co. played a central role in the unfolding of this historical event, whereas on the other hand, the crisis had a decisive impact on the Hopes’ business strategy. Before the credit crisis, the Hopes operated prudently and consistently, and the firm acted as a market-regulating institution. However, in the runup to the crisis, Hope & Co. became increasingly involved in large-scale financial speculation in London and Amsterdam. Subsequently, in the aftermath of the crisis, the Hopes returned to a strategy of caution. They diversified their business portfolio by investing in the loan sector and gradually shifted from mercantile activities to financial services. Moreover, as the last major family firm in Amsterdam, Hope & Co. affirmed its market-regulating role, henceforth becoming the banker’s banker. This thesis...Show moreIn this thesis, I examine the interaction between the business strategy of the Amsterdam banking house Hope & Co. from 1756-1780 and the credit crisis of 1772-1773. Hope & Co. played a central role in the unfolding of this historical event, whereas on the other hand, the crisis had a decisive impact on the Hopes’ business strategy. Before the credit crisis, the Hopes operated prudently and consistently, and the firm acted as a market-regulating institution. However, in the runup to the crisis, Hope & Co. became increasingly involved in large-scale financial speculation in London and Amsterdam. Subsequently, in the aftermath of the crisis, the Hopes returned to a strategy of caution. They diversified their business portfolio by investing in the loan sector and gradually shifted from mercantile activities to financial services. Moreover, as the last major family firm in Amsterdam, Hope & Co. affirmed its market-regulating role, henceforth becoming the banker’s banker. This thesis emphasises the importance of credit governance structures for the resilience of markets and merchant communities. The fact that Hope & Co. established itself as a market-regulating institution poses a challenge to new institutional economics. It raises questions on the role of family firms in (the governance of) early modern credit structures.Show less

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The banker's banker: Hope & Co. and the credit crisis of 1772-1773