This fascinating and wide ranging book, as wide ranging as its title, is based on a conference which took place in Vienna in 2005. Happily, despite the long delay between then and publication, nothing has dated or been superseded in any significant way. The book is a fitting memorial to one of its editors, the late Gerald Feldman.

The title is misleading, however, in that two words which would have added information are not there. The title would better read “Finance, primarily banking, and Modernization”; for, reflecting its continental European origins, the focus is primarily on finance provided by banks. Only two chapters, that on German stock markets between 1836 and 1848 and that on the development of joint stock companies in Sweden, touch on what would have been important in countries with the Anglo Saxon reliance on markets. Nevertheless the emphasis on the role of finance in economic development is very welcome, for too often in recent years has finance been neglected, while all the evidence is that, along with the rule of law, the crucial factor allowing economic growth is finance.

Without a financial system to transfer funds, and to transfer them with little cost in the transferring, funds do not get from savers to borrowers, and innovation and thus growth is severely curtailed. Studies of many countries have shown that. What does this book add?

The book comprises twelve chapters, all bar two dealing with Europe, predominantly central Europe. Most of the chapters are of particular episodes or particular and narrow, albeit interesting, issues. In the first category is for example chapter six, on the financing of the railway system of the Balkans. This is a fascinating and detailed study of how finance evolved to allow the development of infrastructure vital to growth, and in doing so drew on a wide range of institutions and of sources of finance. Happily, capitalism has been international for a long time.

A fascinating, though in itself very narrow, issue is the examination in chapter seven of “The information Network of N. M. Rothschild and Sons in Nineteenth Century Europe”. Information is of course crucial to finance. How a particular banking house developed sources of information and the means to transmit the information once gathered is of wide interest provided it can be generalised to other institutions. This chapter pioneers an important field.

Continuing for the moment with tightly focussed papers the study of post (Second World) War Greek banking is long on detail, but the author gives little guidance on what wider lessons can be drawn. Perhaps none can be, for the Greek situation was special, but guidance on that would have been useful. Similar remarks apply to chapter nine, on the “Modernization of a Dutch Commercial Bank”. Again a fascinating paper in itself, but can it lead us anywhere? In contrast, chapter eight on the “Emergence of Joint Stock Companies” during Sweden’s industrial development is very useful and can be readily generalised to comparison with other countries, in part because of the chapter’s clearly articulated theoretical framework, based primarily on the work of Ronald Coase but with a nod to Berle and Means.

Moving outside Europe there are detailed chapters on the Banque industrielle de Chine in the years 1900 to 1922, and another, the final chapter in the book, on the State Bank of India and the development of banking in that sub continent. These two chapters will be particularly useful to scholars of these countries.

Surprisingly, the chapters of most general interest are in the section of the book (its first) headed “Banking in Austria and Vienna”. This contains a fascinating study of Vienna as both the political and financial centre of an empire. It opens up the prospect of comparative studies of Paris and London, and perhaps even of New York. Similarly the first chapter, on the role of banks in Austria’s development, by providing a detailed analysis of that subject helps give perspectives on why banks were relatively less important, and markets more so, in some other countries.

But the most wide ranging in its implications, and indeed by far the most topical of the chapters, is chapter three, on the efforts of the Austrian central bank to maintain both monetary and financial stability when these appeared to conflict. For while most of the time these two objectives are not in conflict, it is when they are that central banks are perhaps most severely tested, and, in the past few years, that was just when several central banks failed the test. What can be learned from Aurel Schubert’s most detailed study?

First, formal independence of the central bank from government is always under threat at times of crisis. Governments leave central banks alone only when they think they do not matter. Second, sometimes the central bank can solve problems by acting only as a crisis manager, but at other times injections of liquidity are needed. It is these latter that are particularly dangerous, and can, as happened in Austria in 1931, lead rapidly from a banking crisis to a currency one. It has to be hoped that the enthusiastic response of central banks to the recent crisis is not, as the central bank of Austria’s was in 1931, a precursor of, and indeed contributor to graver problems to come.

This is a fascinating book. It is not one for reading from cover to cover. But it contains much of interest to monetary and banking historians and will stimulate much further research; and it contains invaluable lessons for contemporary central bankers.