The paper explores the similiraties and differences between the origin, behavior
and evolution of the central banks of Portugal and Spain. Portugal and Spain
are two countries that share the same peninsular space in the west corner of
Europe. Though different in size and population, the political, social and
economic history of both nations offer more similarities than differences. In the
financial sphere, he resemblances are remarkable. Both nations exhibit very
low levels of financial intermediation, as measured by the ratio between total
bank deposits and GDP. Another common feature of both Iberian nations is the
dominance exerted by a sole institution. However, we also find some
divergences between the financial structures of the two countries that are
worth noting. Three differences merit our particular attention in this paper. The
first diversity refers to the distinct composition of the quantity of money. The
monetary regime is the second difference between the two countries (Portugal
joined the gold standard while Spain remained off the gold standard). Finally,
the Bank of Portugal and the Bank of Spain exhibit also significant contrasts in
their behavior as central banks
