Bank of Amsterdam - Fall of The Bank

Fall of The Bank

The bank, administered by a committee of city government officials concerned to keep the bank's affairs secret, initially operated on a deposit-only basis, but by 1657, was allowing depositors to overdraw their accounts, and was providing large loans to the Municipality of Amsterdam, and the Dutch East India Company. While initially this had remained confidential, it became public knowledge by 1790, in consequence the premium on the bank money dropped from around 6.25% at its peak to a 2% discount, and by the end of the year, the bank declared itself insolvent, offering to sell silver at a 10% discount to depositors. The City of Amsterdam took over direct control in 1791, before finally closing it in 1819.