Paper short abstract:

Analyzing the European control both over the banking sector and public finance through the Imperial Ottoman Bank and the Council of Administration of the Ottoman Public Debt from 1863 to the outbreak of the First World War.

Paper long abstract:

Once integrated the Ottoman Empire in the world economic system, the economic relationship between Europeans and the Ottomans became tighter largely benefitting the European nations. The up-ward trend of the Ottoman indebtedness for allowing the growing state budget expenditures was a strict trouble for the Ottoman government. Started contracting foreign loans to sustain the war against Russia during the Crimean War (1853-1856) the Sublime Porte discovered how much easier was getting money from the international market instead of reforming the State or increasing tax-burden. By doing so, the huge Ottoman public deficit spending had been a constant feature since the 1854. The creation of the Imperial Ottoman Bank in 1863, under the supervision of a French and British committee, gave to the Ottoman government a new tool in order to increase the possibility to get money from international investors. With the function of central, investment and commercial bank, the new financial institution tried gathering around the financial business of the Ottoman Empire under its guidance. Besides the new bank institution, the Ottoman public budget deficit did not stop ramping up. In 1875-76, the Ottoman Empire went to bankruptcy. After the Congress of Berlin in 1878 and in accordance with the Ottoman Government in 1881, the Council of Administration of Ottoman Public Debt was established with the aim of managing some State revenues in order to allow the repayment of the debt.