Refinancing Short‐Term Debt with a Fixed Monthly Interest Rate into Funded Juros Under Philip II: An Asiento with the Maluenda Brothers

18 Pages Posted: 10 Oct 2018

See all articles by Carlos Álvarez‐Nogal

Carlos Álvarez‐Nogal

Universidad Carlos III de Madrid

Christophe Chamley

Boston University - Department of Economics

Date Written: November 2018

Abstract

In the fragmented geographical, fiscal, and financial state inherited by Philip II of Spain, while the public debt reached an unprecedented level (50–60 per cent of GDP), the critical refinancing of unfunded asientos into funded juros was operated by merchant‐bankers who signed the asientos. This process is illustrated, using abundant archival documentation, by an asiento with the Maluenda brothers in 1595, which provided the Crown with steady monthly cash payments for a year with options to sell juros for two‐thirds of the credit, and a monthly rate of 1 per cent on the interim balance. Other examples are provided.

Suggested Citation

Álvarez‐Nogal, Carlos and Chamley, Christophe, Refinancing Short‐Term Debt with a Fixed Monthly Interest Rate into Funded Juros Under Philip II: An Asiento with the Maluenda Brothers (November 2018). The Economic History Review, Vol. 71, Issue 4, pp. 1100-1117, 2018. Available at SSRN: https://ssrn.com/abstract=3264251 or http://dx.doi.org/10.1111/ehr.12619

Carlos Álvarez‐Nogal (Contact Author)

Universidad Carlos III de Madrid

Christophe Chamley

Boston University - Department of Economics ( email )

270 Bay State Road
Boston, MA 02215
United States

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