As early as 1716 the celebrated John Law created the first French bank of issue. It was a great success until it began to promote Law's speculative schemes in the colonies. When the bubble burst in 1721 it spread financial ruin throughout France, and for fifty years no further attempt was made to establish another national bank. In 1776 Turgot started the Bank of Commercial Discount primarily to help the Government with its loans. It became heavily involved in obligations of the Government during the French Revolution and was closed in 1793.

1 Withers and Palgrave: The English Banking System, p. 43.

The present Bank of France was founded by Napoleon in 1800 as a bank of issue and of discount with a capital of 30,000,000 francs. At the outset it was a private institution free from government interference and without special privileges. Two other banks had been established in 1796 and 1797. One of these voluntarily consolidated with the Bank of France and the other was driven in, after it had refused to loan money to the Government, by the act of 1803, which gave the Bank of France the exclusive privilege of issuing bank notes in Paris, raised its capital to 41,000,000 francs, and provided that no bank should be established in the departments without authority from the Government. Napoleon determined to make the bank national in its operations, and in 1808 it was given the exclusive right of note issue in every town in which it should establish a branch.

After the fall of Napoleon the influence of the bank waned somewhat and between 1830 and 1840 a large number of independent banks, authorized to issue their own notes, were established in the leading cities. The contest between these department banks and the Bank of France was finally settled in 1848 when the latter was given a monopoly of the issue of notes, and the nine existing department banks were absorbed. This consolidation required an increase in the capital stock of the Bank of France to 91,250,000 francs ($18,000,000). It survived the severe trial of the Franco-German War and the days of the Commune and rendered invaluable service to the Government in floating loans and aiding in the payment of the heavy war indemnity to Germany.