Mastering the narrative and the dirty tricks of trade: The re-establishment of a Swedish bank in 1668

Abstract

In 1657, Sweden saw the creation of its first bank, the private royal-chartered Stockholms Banco. It crashed a few years later and was reconstructed as the Bank of the Estates of the Realm. The intention here is to show how a bank could (re)open so soon after a disastrous crash and to point at some key factors in its success. The main argument posits not only that the principals of the new bank required an adequate institutional framework to make a credible commitment, but also that the prosperity of that bank depended upon said principals’ ability to control the narrative of the crashed bank and to recruit a good staff with strong personal credit, whose self-interest it could harness and credit it could use.