Encyclopedia of Early Modern History Online

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Mandatory loan
(867 words)

A bond is a documented promise to pay, with a stipulated interest rate, term, and method of redemption. Unlike credit or a loan for consumption, a bond is negotiable, that is, it can be resold. In this sense, a bond is similar to a bill of exchange, but the latter usually has a term of less than a year, whereas a bond has a longer term. The distinction between the money market and the capital market is analogous. Ever since the latter was created in the 17th century, bond trading has been its primary activity. 

The payment promised at final maturity represents a rate of 100%. Both…

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Pfister, Ulrich, “Mandatory loan”, in: Encyclopedia of Early Modern History Online, Editors of the English edition: Graeme Dunphy, Andrew Gow. Original German Edition: Enzyklopädie der Neuzeit. Im Auftrag des Kulturwissenschaftlichen Instituts (Essen) und in Verbindung mit den Fachherausgebern herausgegeben von Friedrich Jaeger. Copyright © J.B. Metzlersche Verlagsbuchhandlung und Carl Ernst Poeschel Verlag GmbH 2005–2012. Consulted online on 18 November 2019 <http://dx.doi.org/10.1163/2352-0272_emho_SIM_030909>
First published online: 2015
First print edition: 20190801



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