Bank of England

The Bank of England is the central bank of the U.K., and most modern central banks have been based on it. Established in 1694, it is the world’s 8th oldest bank. The bank is owned by the U.K. government, and its headquarters are located on Threadneedle Street in London. Related BRANCH articles: Mark Crosby, “The Bank Restriction Act (1797) and Banknote Forgery”; Alexander J. Dick, “On the Financial Crisis, 1825-26”; Lynn Shakinovsky, “The 1857 Financial Crisis and the Suspension of the 1844 Bank Act”

                                                                 

Coordinates

Latitude: 51.513773700000
Longitude: -0.087843700000

Timeline of Events Associated with Bank of England

Date Event Manage
27 Feb 1797

End of specie payments

On 27 February 1797, the Bank of England ceased specie payments. The Bank’s bullion reserve supported the value of its notes and bills, which were convertible upon request to specie (gold and silver coins). This was followed by the passing of the Bank Restriction Act (37 Geo III c. 45) on 3 May 1797. Image: George Cruikshank, Bank Restriction Note (1819). Used with permission.

In 1795, the Bank began experiencing a significant drain on its bullion reserve due to the Government’s need for gold to finance the war with France and also to pay for imported grain after a succession of bad harvests. Concerned for its ability to maintain the convertible value of its banknotes, the Bank embarked on a policy of contraction. While initially successful, this reduction in the number of circulating banknotes was undermined in 1796 by runs on banks in Newcastle, Sunderland, and Durham. These runs prompted other provincial banks to suspend specie payments and request monetary support from the Bank of England. As news of the runs on northern banks filtered into London, panic gripped the financial community and demand for Bank of England notes increased exponentially as they still were convertible to specie. By 27 February 1797 the Bank’s bullion reserve had dwindled to less than £1,000,000, forcing it to suspend specie payments altogether (Order of the Privy Council). As a consequence of rendering its notes unconvertible, the Bank shook public confidence in itself and undermined the circulating paper currency. Indeed, without a convertible currency the British financial system was in imminent danger of collapse.

Articles


Mark Crosby, “The Bank Restriction Act (1797) and Banknote Forgery”

Dec 1825

Bank failures in London

Bank of EnglandOn December 1825, bank failures began in London. The collapse of important City banks lead to further bank failures across Britain and brought financial crisis to the point where the Bank of England must take extreme measures. Image: The main Bank of England façade, c. 1980. Permission is granted to copy, distribute and/or modify this document under the terms of the GNU Free Documentation License, Version 1.2 or any later version published by the Free Software Foundation.

Articles

Alexander J. Dick, “On the Financial Crisis, 1825-26″

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