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History of Österreichische Nationalbank
The Österreichische Nationalbank (Austrian national bank) started its business activities on 2 June 1923. It was led by the Austrian management of its predecessor the Österreichisch-Ungarische Bank. The legislative process to set up this bank had already been initiated in mid 1922. On 24 July 1922 the law about the creation of a central issuing bank was passed in Austria. Four months later, on 14 November 1922, another law regulated the status and terms of the central bank. The first president of the Österreichische Nationalbank was Prof. Dr. Reisch.
The Österreichische Nationalbank became the only authorised institution to issue notes with the status of legal tender. Initial policies applied by the bank had a positive impact on the monetary situation in Austria.
A monetary reform, based on the law about the Schilling (1 Schilling – 10,000 Kronen) from 20 December 1924, provided the bank with the means to overcome the monetary crisis in the country. Even during the economic crises of the early 1930s the central bank was able to support the economy and further its recovery.
With the annexing of Austria through Germany in 1938 the Österreichische Nationalbank was abolished. The Schilling was replaced by the German currency. The Reichsmark (1Reichsmark = 1.5 Schilling) was managed by the German Reichsbank in Berlin.
After the end of World War 2 Austria became an independent country again. As early as May 1945 the provisional government of Austria decided to reintroduce the Schilling currency. The Österreichische Nationalbank were again to become the Austrian central bank responsible for the issuance of the banknotes. The law about the Schilling (30 November 1945) ensured the replacement of the Reichsmark and other currencies floating in Austria. The money protection law (Währungsschutzgesetz) from 21 November 1947 helped to stabilise the currency.
The Österreichische Nationalbank managed the money supply till 2001, when the Schilling was replaced by the common European currency – the Euro. During this period the Schilling became a stable currency. This was helped by it being pegged over many years to the German currency the Deutsche Mark (7 Schilling = 1 Deutsche Mark), which was supported by the Österreichische Nationalbank in the way of co-ordination their policy with the German central bank – the Bundesbank.
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