Menelik may not have been Ethiopia's great modernizer, but he certainly was infatuated with the instruments of modernity. Unable to resist new ideas, Menelik actively sought the economic panacea promised by formal banking. The incentive to develop a state bank patterned on a Western model was simple; it was considered a prerequisite of modern development.

As early as 1875 Pierre Arnoux advised Menelik that Ethiopia needed, its own currency and financial institutions to prevent the gold and silver export that depleted the country of its wealth. In 1890, Leon Chefneux further advised on the merits of the currency and reform and banking.

Lowered interest rates were one of Menelik's objectives in contemplating the establishment of a formal bank that would act as the nation's central bank, as well as the sole private lending institution.

CHARLES SCHAEFER, THE POLITICS OF BANKING