This paper describes the development of the deposit bank in Europe to 1600. Deposit banks allowed customers to make payments by transferring deposits on the books of the bank rather than by settling in coin. The paper describes how such payments were made and what kinds of transactions they were used for. Deposit banks developed into financial intermediaries, and the paper examines their liabilities, their assets, the methods they used to manage liquidity and risk, and the regulation to which

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... ey were subject. The authorities responded to increasingly frequent failures of deposit banks by establishing public banks.