I recently came across a balance sheet of ‘Amsterdamsche Wisselbank’ or ‘ The bank of Amsterdam’(1609 – 1820). The Bank of Amsterdam was the last bank in history that operated without fractional reserves.

Compared to modern banks, where bank reserves only amounts to a fraction of outstanding debt, The Bank of Amsterdam kept close to a 100 % reserve ratio between the years 1609 and 1720, as you can se below.

In 1610, total liabilities reached 925,562 florins. By looking at coins and other precious metals held in vault, we can se that 100 % of the banks liabilities constituted bank reserves.

By adherence to traditional legal principles and accountability to all its liabilities, the bank thrived as total assets grew 31 fold in the next 150 years, and totaled 30,835,194 florins in 1764.

As U.S. are currently digging it self deeper into a recession, with employment in decline, manufacturing on a slippery slope, inflation on the move, and large banks are on the verge of bankruptcyt, perhaps it is time to take a look in the rear-view mirror for future guidence.

Source: van Dillen (1925), A compiled collection.