NARROW BANKING

In 1791, the Bank of Amsterdam was taken over by the city. Established in 1609, the original charter required the bank to make deposits redeemable on demand as a "narrow" bank, but the bank quickly began lending, Roberds and Velde (2014, p.35), Quinn and Roberds (2014, p.10). As Fisher (1936) points out, the Bank of Amsterdam in the 17th Century "...broke faith and secretly lent out some of its 100% reserves. Ultimately, this policy caused its failure..."