ABSTRACT
The dichotomy between ‘subjective’ (personal) and ‘objective’ (technical) criteria for the assessment of risks in banking plays a role in how the transition from personal finance to impersonal finance is portrayed in economic history. The standard view is that with the financing of industry on a large scale impersonal exchange structures, like joint-stock banks, take over from the limited personal lending of private bankers. The joint-stock banks’ information procurement is supposed to be more technical, more objective, and said to look markedly different from the personal relationships that dominated industry finance prior to the 1850s. Authors emphasize the limits that personal and reputational effects impose on lending. I compared a significant range of archival material from private and early joint-stock banks with information from universal banks in the early twentieth century, and find little support for that proposition. I endeavour to counter the argument that with impersonal exchange primary information procurement becomes paramount, and to show that reputation, distinct from personal information, remains in the bankers’ eyes a short-cut to missing personal and technical information. The majority of cases I refer to below concern project finance in foreign countries, thus showing how reputation crosses physical and geographical borders.
