ABSTRACT
This chapter analyses the evolution of banks of issue in the economic environment of the time, throughout the period that they were in existence, between 1844 and 1874. While the provincial banks maintained a notable degree of stability in terms of the money created, the Bank of Spain fluctuated wildly: between 1858 and 1866 two complete cycles of expansion and contraction were observed, with highs close to 100 million pesetas and lows around 50 million. The provincial banks of issue bore the brunt of the downturn but, with a few exceptions, they managed to stay afloat and even played their part in the later return to financial stability. Naturally enough, the role played by the provincial banks of issue in each region and in Spain as a whole was also conditioned by the existence of other financial entities competing with them either directly or indirectly.
