After studying at Gießen, Heidelberg and Göttingen, he entered law. When the revolution of 1848 broke out he took an active part as one of the leaders of the republican party in his native city, both as popular orator and as editor of one of the local papers. In 1849 he took part in the republican rising in the Palatinate and Baden; on the restoration of order he was condemned to death, but he had escaped to Switzerland. The next years he spent in exile, at first in London, then in the Netherlands; in 1852 he went to Paris, where, by means of private connections, he received an appointment in the bank of Bischoffheim & Goldschmidt, of which he became managing director, a post which he held till 1866. During these years he saved a competence and gained a thorough acquaintance with the theory and practice of finance. This he put to account when the amnesty of 1866 enabled him to return to Germany.
He was elected a member of the Reichstag, where he joined the National Liberal Party, for, like many other exiles, he was willing to accept the results of Otto von Bismarck’s work. In 1868 he published a short life of Bismarck in French, with the object of producing a better understanding of German affairs, and in 1870, owing to his intimate acquaintance with France and with finance, he was summoned by Bismarck to Versailles to help in the discussion of terms of peace. In the German Reichstag he was the leading authority on matters of finance and economics, as well as a clear and persuasive speaker, and it was chiefly owing to him that a gold currency was adopted and that the Reichsbank took form; in his later years he wrote and spoke strongly against bimetallism. He was the leader of the free traders, and after 1878 refused to follow Bismarck in his new policy of protection, state socialism and colonial development. He is also the co-founder of Deutsche Bank. It was founded in Germany on January 22, 1870 as a specialist bank for foreign trade in Berlin by the private banker Adelbert Delbruck and the politician Ludwig Bamberger.
In 1892 he retired from political life and died in 1899. Bamberger was a clear and attractive writer and was a frequent contributor on political and economic questions to the Nation and other periodicals. His most important works are those on the currency, on the French war-indemnity, his criticism of socialism and his apology for the Secession.