Introduction
Milestone birthdays present an opportunity to reflect not just on one's own age but also to anticipate upcoming family birthdays of significance or recall past family anniversaries. Central banks are no different in this respect. Many central bank histories start with a reference to the oldest surviving member of the family, the Swedish Riksbank, founded in 1668. In the genealogical table of the oldest central banks in the world, drawn up by Forrest Capie, Charles Goodhart and Norbert Schnadt in their seminal contribution marking the tercentenary of the Bank of England, the privilegirte oesterreichische National- Bank (OeNB) comes in sixth. Apart from the above-mentioned Sveriges Riksbank and the Bank of England (1694), the only central banks founded before the OeNB were the Banque de France (1800), the Bank of Finland (originally established as the Finnish Office for Exchange, Lending and Deposits in 1811) and De Nederlandsche Bank (1814). Finishing sixth was in fact close for the OeNB: Founded on June 1, 1816, it is just 13 days older than Norges Bank. Yet this genealogy does not list defunct family members like the Banco di San Giorgio (1407-1805), the Bank of Amsterdam (1609-1820), or the Wiener Stadtbanco (1706-1816), precursors who would change the ranking had they survived. Moreover, central banks' birth dates are frequently stated with the reservation that early on, these banks had few similarities with contemporary monetary authorities, evolving into central banks as we know them only in a slow process and over an extended time span. Passage to adulthood, to continue the analogy, is generally linked to the assumption of a lender-of-last-resort role, meaning the provision of sufficient central bank money during a financial crisis if required. To this end, the central bank must have "grown up" to be a neutral, nonprofit-oriented economic agent who acts in the general economic interest rather than competing with other commercial banks.
Two recurring challenges
Now, if the OeNB was born in 1816, when did it reach adulthood? The eventful history of Austria's central bank does not lend itself easily to a teleological interpretation according to which early banks of issue developed into modern central banks at a determinable point in time. Thus, rather than judging at what point and to what degree the OeNB fulfilled modern-day criteria of central banking, a more appropriate approach is to view the bank as an institution that operates in a space that both in the past and today is defined by two dimensions: monetary stability and financial stability.
Of course, the meaning of monetary and financial stability has changed during the past 200 years. Originally, money was considered to be stable if all coins were struck with consistent amounts of metal; later, the notion of monetary stability was linked with the convertibility of paper money against coins with a specified metal content. Not until the 20th century was monetary stability understood as the stability of a broadly defined index of consumer prices. Financial stability, on the other hand, has typically been a much broader concept, embracing the smooth operation of payment systems; last resort lending; the supervision of individual banks and other financial intermediaries; or the prevention of macroeconomic imbalances such as real estate price bubbles driven by excessive mortgage lending, which may jeopardize the stability of the entire financial system. The basic issue of monetary and financial stability has always been the same: Since money has been around, the sovereigns who exercised the right of coinage had an incentive to finance their expenditure by debasing the currency, either by reducing the weight of coins or by adding base metals to the alloy. Numerous instances of inflation from Classical antiquity to the modern age demonstrate this process; paper money, once it had been invented, made debasement only easier. As money and credit are closely r