Financial Intermediation in Colonial Seventeenth- and Eighteenth-Century Buenos Aires: Credit, Trust, and Asymmetric Information

Abstract

In colonial Spanish economies, notaries played a legal and a financial role. Long before banks existed in the region, commercial actors relied on notaries to access credit and to allocate it, because notaries had better access to information than the parties to the transaction. The notary and his office were an informational device, which counterbalanced the asymmetric information between contract parties, providing connections between potential lenders and potential borrowers without the need for pre-existing interpersonal links.