The Worldwide Legacy of Haute Banque

From 19th to 21st century

by Roger Nougaret (Volume editor) Hubert Bonin (Volume editor)
©2022 Edited Collection 198 Pages


The Haute Banque, an elite form of private or merchant banking, emerged in France in the early 19th century, reached its peak around 1850-1860 before declining in the early 20th century and almost disappearing in the 1960s-1980s. Often characterized by their religious origins and family networks, these banking houses escape a clear definition. Their expansion is not limited to France, as banks with similar features can be found in Europe and throughout the world.
This book, which brings together some of the best specialists in the field, examines the legacy of the Haute Banque. How and until when did it influence other banking establishments, through its managers, its practices, and its values? What business lines have these bankers helped to shape, right up to wealth management and asset management of today? What was the resilience of these finance companies? Is there a resurgence in the 21st century of the houses or the spirit of Haute Banque?

Table Of Contents

  • Cover
  • Title
  • Copyright
  • About the editors
  • About the book
  • This eBook can be cited
  • Contents
  • Foreword A few thoughts on Haute Banque (Jacques de Larosière)
  • Introductory speech: The legacy of Geneva’s private bankers (Hugo Bänziger)
  • General Introduction: The Haute Banque between history, myth, and resilience (Hubert Bonin & Roger Nougaret)
  • 1. An ever-fascinating story
  • 2. The intersection between banking revolutions
  • 3. The issue of the long-lasting of the Haute Banque
  • 4. The surprise of the current Haute Banque spirit bloom
  • 5. Conclusion
  • Part I The roots of the Haute Banque
  • Chapter 1 The Haute Banque and real estate asset management: The case of Camondo (Lorans Tanatar Baruh)
  • 1. Elites business and investments strategy
  • 2. Early years of Camondos’ investments in real estate
  • 3. Investments to transform the older structures of property
  • 4. Camondos’ loss of interest in their legacy in Istanbul
  • 5. As a conclusion: Taksim residential buildings project
  • Chapter 2 The “new bank” and the culture of the Haute Banque in France in the second half of the 19th century (Nicolas Stoskopf)
  • 1. The limits of the Haute Banque’s participation in the creation of the new banking economy
  • A. The Crédit mobilier (1852), a longstanding exception
  • B. Where the Haute Banque was conspicuously absent
  • C. The emergence of truly “mixed” projects
  • D. Two socio-cultural models
  • 2. The new banking system influenced by the culture of the Haute Banque
  • A. Personalization of management
  • B. The risk of confusion of interests
  • C. Abuse of articles of association
  • D. Sanctions against bad practices
  • 3. Conclusion
  • Chapter 3 The Haute Banque, American Civil War debt, and the integration of 19th century capital markets (David K. Thomson)
  • 1. European Haute Banque and the US market
  • 2. German markets involved overseas
  • 3. The rush of European investors: Transatlantic bridgeheads within Haute Banque
  • 4. Conclusion: The Haute Banque apprenticeship of transatlantic finance
  • Part II From history to present times: Issues of path dependency
  • Chapter 4 BNP Paribas and the legacy of Haute Banque (Éric Bussière)
  • 1. During the founding period: Haute Banque as a genetic factor?
  • 2. Haute Banque in practice in the 1870s–1880s
  • 3. What was left of this model and its convergence after the 1889 crisis of Comptoir d’escompte de Paris?
  • Chapter 5 The history of Banque de Neuflize OBC (1667–2017) (Ton de Graaf)
  • 1. The stages of growth of a bunch of Haute Banque houses
  • A. First, the founding families seeking refuge abroad
  • B. The André and Mallet companies under the Ancien Régime
  • C. The French Revolution: A time of hardship
  • 2. The industrial development of the 19th century: The activities of the André and Mallet firms in France and abroad
  • 3. The interwar period: A period of adaptation and modernization
  • 4. The wars: A dormant period for business
  • 5. Since 1945, the advantages of the mergers: Renewing the Haute Banque legacy
  • Chapter 6 A part of the legacy of Haute Banque? The asset management business in France at the beginning of the 21st century (Laure Quennouëlle-Corre)
  • 1. A quick reminder of Haute Banque in the 19th century
  • 2. The development of wealth and asset management in France
  • 3. Discussion about the legacy of Haute Banque
  • A. A part inherited from the past
  • B. A new financial architecture
  • 4. Conclusion
  • Chapter 7 French Haute Banque: From the legacy to the revival since the 1980s (Hubert Bonin)
  • 1. Tempests and uncertainties
  • A. The shock of nationalization for Rothschild in 1982–1984
  • B. The issue of transgenerational shift
  • C. The issue of Europeanization and globalization
  • Transatlantic legacy at Lazard
  • European legacy at Rothschild
  • D. The issue of competitiveness
  • 2. A key target: Skills and competitiveness about mergers & acquisitions
  • A. Mergers & acquisitions profiting to Rothschild and Lazard
  • B. Sharpening skills in financial advice
  • C. Portfolios of skills and connections as recent advantage edges: The case of Lazard
  • D. The case of Rothschild
  • E. From the legacy to the future of finance: The upsurge of boutiques
  • F. Resisting the grip of bigwigs
  • G. The ever active spirit of Haute Banque
  • 3. Haute Banque houses active on the underwriting market
  • 4. Business models and strategies at stake
  • A. Haute Banque houses as rescuers of capitalism?
  • B. Developing asset management
  • C. Managing directly financial portfolios: True merchant banking
  • 5. A true tradition: Wealth management and private banking
  • 6. Final assessments
  • Panel discussion: Incubators of banking innovation (Hugo Bänziger, David El Nouchi, Yassin Hankir, Anne-Cécile Lugagne-Delpon, Bernhard Obenhuber, Jean-Michel Pailhon & Arash Sorouchyari)
  • Concluding remarks (Youssef Cassis)
  • Index (People and Companies)
  • About the authors

←12 | 13→

A few thoughts on Haute Banque

Jacques de Larosière

The Haute Banque (or merchant banking) concept that developed in Paris in the first half of the 19th century is interesting for those who are observing the ups and downs of the global banking system of today.

The first thing that strikes me is that Haute Banque is not amenable to a precise definition. It takes the art of history and sociology to understand what it really means and covers. And even after such research, the concept remains somewhat vague and difficult to define with precision. In a world of complex regulation in which each activity, each financial product, is the object of detailed prescriptive and comprehensive definitions, we should reflect a minute on the possible advantages of “vagueness” as opposed to extreme precision. I wonder whether innovation has not suffered from increasing sophistication in regulation. Of course, we all know that too much deregulation – that started in the 1980s – was responsible for some of the major weaknesses of the system.

But my point is different. I am interested in understanding how the banks in France in the years of intense – I should say revolutionary – technological changes in the economy, were able to adapt and find new ways to finance exuberant investment needs. Haute Banque houses had to invent, to start from scratch. The fuzziness and freedom that presided over the way they operated were probably, at that stage of their development, a crucial element of their success. I am not sure that if a transformation of the economy of the same intensity were to happen today, the accumulated knowledge and prudence of regulators would allow innovations of the magnitude that took place in the years 1800 to 1850. Let us not underestimate the significance and impact of the banking innovations of those years: arranging and financing enormous international infrastructure projects (in particular railways), attracting global savings ←13 | 14→by developing bond and equity markets, lending to Governments, taking bank participations in industrial ventures…

The second feature of Haute Banque that strikes me has to do with persons. More important than the characteristics of the institution itself was the quality of the people who were getting together. Family links were essential. Partners knew each other from childhood and could trust each other as they could be trusted by their partners. That was the secret of Haute Banque houses: never associate yourself with people you don’t know perfectly and therefore you can’t entirely trust.

This explains the family nature of the Haute Banque houses of that time. Those institutions kept strong cultural, religious, matrimonial links. Protestant and Jewish banks flourished at the time although religion was never a distinctive criterion. What was important was the personal and family links between partners: it is only in that sense that religion, as a characteristic of a family tradition, could appear. All these traits are in complete contrast with present banks, as we will see later on.

My last point relates to responsibility and capital. Haute Banque houses were “sociétés de personnes,” i.e. not limited liability corporations. The participants in a Haute Banque house used to pool all their assets in the bank and were individually and “solidairement” responsible on their own wealth for the losses incurred by the company. This feature explains the importance of trust among the “partners” that I have already stressed. It also explains why every partner had to approve individually each decision to invest.

This is obviously a major difference with the “limited” liability concept that developed in the second half of the 19th century, spread into the “investment banks” or “banques d’affaires,” like Banque de Paris et des Pays-Bas or Banque de l’Union parisienne, and prevails today. One has to understand that, in a way, what I have called the “vagueness” of the Haute Banque concept and its freedom of action were the offsetting elements of their unlimited responsibility. The bank was free to act but the bankers could lose their wealth if decisions had been imprudent.

In a way, regulators had no reason to impose capital constraints and obligations on such banks: as long as the assets of the family were sufficient – and that was critically followed and gauged by the de facto “club” of merchant bankers of Haute Banque – the risks taken were integrally covered by the bankers themselves. What a contrast with the present banking system where the managers of banks are seldom the owners, ←14 | 15→where prescribed capital is only a very limited part of credit extended to the clients, and where those institutions, since they are too dangerous to fail, benefit from a de facto guarantee provided by the Government!

So, in terms of risk management and of the responsibility of bankers, I believe the “Haute Banque” concept should be a source of meditation. I would encourage the members of the Basel Committee to organize, along with historians, a seminar on the respective risks and advantages of the Haute Banque concept as opposed to the modern highly regulated but anonymous system in which decisions are influenced by short term profit objectives and are, in fact, delinked from direct personal responsibility. The idea is not to go back to 1830, but to look at valuable ways of instilling best practices of the past in present rules.

←16 | 17→

Introductory speech:
The legacy of Geneva’s private bankers

Hugo Bänziger

More than two hundred years ago, at the end of the Napoleonic Wars, the name of Henri Hentsch was well-known in Paris’ financial circles. With his jolly personality and driving entrepreneurial spirit, Hentsch had built one of the most prominent entity of the Haute Banque in Paris which served the French Government as well as wealthy individuals. Hentsch was a typical representative of a group of Protestant bankers who ushered towards a new area of finance and contributed significantly to the modernization of French society and industry. Geneva was small though – about the size of the Quartier Latin in Paris. How could people from such a small, almost provincial place, have had such a big influence and leave such a legacy?

As always, a bit of context helps to understand Hentsch’s successful career. Only related through his mother to the established circles in Geneva, the young Hentsch learnt early about the town’s business. The expulsion of the Huguenots by Louis XIV in 1684 re-established Geneva’s fledging trading business. With more than 10 % of the protestant refugees travelling through Geneva and 5,000 staying permanently, the town took back a large junk of the commerce that had migrated to Lyon over the previous century. Watch making, trade finance, silk and cotton manufacturing became Geneva’s thriving businesses. With their protestant relatives scattered all over Europe, some Huguenot families started financing trade and offered payment services.

It did not take long for the French kings to notice that bankers from Geneva – the very same who had to leave France in 1684 – could reliably transfer large amounts of silver to the French Allies in Milan and Bavaria during the great coalition wars of the 18th century. From today’s perspective, the commissions were enormous. The Geneva bankers charged ←17 | 18→10 % of the money transferred. The elegant hôtels particuliers in Geneva’s old town built by the Lullin, Mallet and Gallatin families testify of the enormous wealth of these 18th century bankers. These bankers had built a network of family members and trusted agents across Europe, developed the knowledge necessary to manage the logistics of money transfer and knew which individual had surplus funds which could be invested. They know how to raise funds. It was a lucrative business. A century later, Henri Hentsch would still make a big fortune as a payment agent for Napoléon’s armies in Italy.

His first job, however, was with Picot, Fazy & Cie, the silk factory of a relative. He started working in Geneva, then managed the firm’s branch in Lyon. By the age of 26, he was made partner. Due to the revolutionary fever that befell the town, he had to close the Lyon branch and returned to Geneva where local revolutionaries convicted him to a prison sentence. He escaped to Switzerland but returned to Geneva in 1795, when the French Directorate had re-established law and order in France. By that time, people needed jobs and trade had to be re-established. Hentsch opened his first bank the following year and focused on trade finance and wealth management.

Two years later, he teamed up with Jean Gédéon Lombard, a man with perfect connections to the local establishment. The partnership lasted only until 1798 when the two parties split over diverging business ideas. In the same year, France annexed Geneva and it became a French Département. Lombard stayed in his hometown catering to the local business. Hentsch noticed the demand for his services in the French capital and moved to Paris. Under the new consul and later Emperor, business prospered. It was the time when Napoléon developed Belgium as France’s industrial heart land, the Louisiana purchase was negotiated, the army modernized and professionalized, the Banque de France and the Paris Stock Exchange were established, and the Code Napoléon reformed all aspects of law and commerce. France was “en marche.”

In this fast-moving environment, the talented, 40 years old Hentsch with his many connections throughout Europe, was a man one could do business with. Quickly, he developed a thriving financing business that outpaced his previous operations in Geneva. If we were to measure his success in today’s money, he would be a billionaire. His beautiful house “Mon Repos” on the shores of Lake Geneva – looking towards the mighty Mont-Blanc and now open to public visitors – is a perfect reminder of his success.←18 | 19→

After Napoléon’s defeat at Waterloo and the establishment of a new European order by the Congress in Vienna in 1815, Hentsch alternated his stays between Geneva and Paris. Geneva was his family home, but he knew that the real business opportunities were in Paris. The Restoration slowed down the pace of innovation in France and the heavy loss of population during the war was an enormous burden on the economic development. But most of the new institutions Napoleon had created did survive. It took however much longer for them to have the desired impact. In 1850, the Bourse de Paris had less than fifty securities listed. It would take Napoléon’s nephew, Napoléon III, to dynamize the French economy again.

Despite all this, Henri Hentsch was not deterred. When in Paris, he threw himself into all sorts of activities. He helped to establish the Compagnie royale d’assurances maritimes, we find him in 1818 as founding director of the Caisse d’épargne et de prévoyance, as much as he arranged loans for the City of Paris (1818), Russia (1819) and Spain (1820). Towards the end of his life, the limitations of his business model became apparent though. None of his sons wanted to step into the father’s shoes. Upon his death in 1835, the Hentsch bank was split into several successor companies. The partnership model lacked the continuity required by a modern, industrial society.


ISBN (Softcover)
Publication date
2022 (April)
Bruxelles, Berlin, Bern, New York, Oxford, Warszawa, Wien, 2022. 198 pp., 15 fig. col., 1 fig. b/w, 11 tables.

Biographical notes

Roger Nougaret (Volume editor) Hubert Bonin (Volume editor)

<SUB>Roger Nougaret successively directed the historical archive departments of several French banking groups. He is a member of the Association for the History of BNP Paribas and of the Comité des Travaux historiques et scienti_ ques (École des chartes/Paris Sciences Lettres). </SUB> <SUB>Hubert Bonin </SUB><SUB>is a researcher in modern economic history at Sciences Po Bordeaux and at Bordeaux School of Economics Research Centre at Bordeaux University. He is a specialist of the history of services and moreover of French banking history.</SUB> <SUB>He has co-guided a dozen of research programs about companies, their strategies and practices. He is involved in projects about investment banking from the Paris market-place, merchant and trade banking in China, French banking, and entrepreneurship and European business.</SUB>


Title: The Worldwide Legacy of Haute Banque
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