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Institutional investors in the Portuguese credit market (1550–1800): The case of the Misericórdias

Published online by Cambridge University Press:  25 January 2024

Lisbeth Rodrigues Open the ORCID record for Lisbeth Rodrigues [Opens in a new window]
Lisbeth Rodrigues*
Affiliation:
Gabinete de História Económica e Social (GHES), ISEG—Lisbon School of Economics and Management, University of Lisboa, Lisbon, Portugal Nova School of Business and Economics, Universidade Nova de Lisboa, Lisbon, Portugal
*
Email: lrodrigues@iseg.ulisboa.pt
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Abstract

This article questions the drivers behind the distribution of savings in different capital markets in Portugal between 1550 and 1800. A novel dataset of credit transactions, interest rates and debt service documents a shift in the lenders' investment behaviour. By 1712, one of the leading institutional creditors—the Misericórdias—had ceased to allocate funds to the sovereign debt market. Data reveal that this disinvestment was neither related to the poor performance of debt service nor to the lure of potentially higher returns on private credit. We argue that changes in the rationales for issuing debt justify the drop in the number of institutional investors in the public credit market, and this correlates with the heavy allocation of funds into private lending.

Resumen

Resumen

Este artículo cuestiona los factores que impulsan la distribución del ahorro en los distintos mercados de capitales de Portugal entre 1550 y 1800. Un novedoso conjunto de datos sobre transacciones crediticias, tipos de interés y servicio de la deuda documenta un cambio en el comportamiento inversor de los prestamistas. En 1712, uno de los principales acreedores institucionales—las Misericórdias—había dejado de destinar fondos al mercado de deuda soberana. Los datos revelan que esta desinversión no estaba relacionada ni con el mal desempeño del servicio de la deuda ni con el atractivo de los rendimientos potencialmente más altos del crédito privado. Argumentamos que los cambios en las razones para emitir deuda justifican el abandono de los inversores institucionales en el mercado de crédito público, y se correlaciona con la fuerte asignación de fondos al crédito privado.

Keywords

private loanssovereign debtinvestment decisionsinstitutional investorsfinancial repressioncrédito privadocrédito públicoinversionesprestamistas institucionalesrepresión financiera

JEL classification

H63: Debt • Debt Management • Sovereign Debt G11: Portfolio Choice • Investment Decisions G32: Financing Policy • Financial Risk and Risk Management • Capital and Ownership Structure • Value of Firms • Goodwill N23: Europe: Pre-1913
Type
Articles/Artículos
Information
Revista de Historia Economica - Journal of Iberian and Latin American Economic History , Volume 42 , Issue 1 , March 2024 , pp. 91 - 119
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Copyright
Copyright © The Author(s), 2024. Published by Cambridge University Press on behalf of Instituto Figuerola de Historia y Ciencias Sociales, Universidad Carlos III de Madrid

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References

Sources and official publications

Chancery books of:

King João III, books 31, 36, 40, 53, 67, 71;

King Sebastião and King Henrique, books 1, 3, 5, 7, 9, 11-14, 16-22, 26-27, 29-36, 38-39, 41, 43-46;

King Filipe I, books 1-14, 16, 20-30;

King Filipe II, books 1-5, 7-8, 11, 13-15, 19, 20-22, 24-25, 27-28, 30, 32-33, 37-38, 40-41, 44-45;

King Filipe III, books 2, 4-10, 12-14, 19-21, 24, 27, 33-35;

King João IV, books 1-9, 11, 14, 25;

King Afonso VI, books 1-11, 13, 15-18, 38, 42, 47, 50, 52-53;

King Pedro II, books 1-5, 7-11, 14-15, 20, 35;

King João V, books 1-15, 17-21, 24-27, 35;

King José I, books 8, 15, 17-23, 38-40, 58-60, 72-73;

Queen Maria I, books 5, 8-10, 12, 15, 25, 31.

Gestão Financeira,

Instrução da Casa, Balanço da receita e despesa da tesouraria geral da Santa Casa da Misericórdia … (1781-1801), Books 1-3.

Despesa e Receita, Cofre (1766-1767), Book 1.

Série D, Banco 6, Books 2, 4; Banco 8, Books 1-8;

Série E, Banco 1, Books 1-41; Banco 2, Books 1-32; Banco 3, Books 1-28; Banco 6, Book 20;

Série H, Banco 8, Books 1-31.

Livro Próprias, Cofre, A-PUB/3476

[Juro das alfândegas e almoxarifados do reino], PBA. 125.

Relação de gastos que a Santa Casa da Misericórdia de Lisboa fez este ano… (1693-…). Lisbon: Na Officina de Miguel Manescal.

Sovereign debt and private credit in Portugal (1668-1797) (PTDC/HARHIS/28809/2017) available at: www.debt.pt

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