A Pound of Flesh for the King

Garcia, Daniel (2016): A Pound of Flesh for the King.

Abstract

This paper provides a simple model of banking in the shadow of expropriation, which sheds light on the credit markets of XIIIth Century England and the economic reforms introduced by the Angevin Kings. We argue that the fear of expropriation induced bankers to liquidate loans early and reduced the volume of trade in the credit market. To solve this commitment problem, the nobility imposed a restriction on the ability of the king to profit from the loans that fell into his hands. The subsequent demise of these reforms was likely to contribute to the decay of Jewish bankers under Henry III and their eventual expulsion in 1290.

• Item Type: MPRA Paper
• Language: English
• Keywords: Magna Carta; Jewish History; Banking
• Subjects: G - Financial Economics > G2 - Financial Institutions and Services; G - Financial Economics > G2 - Financial Institutions and Services > G21 - Banks ; Depository Institutions ; Micro Finance Institutions ; Mortgages; K - Law and Economics > K1 - Basic Areas of Law; K - Law and Economics > K1 - Basic Areas of Law > K11 - Property Law; N - Economic History > N2 - Financial Markets and Institutions > N23 - Europe: Pre-1913

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