Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/247031 
Year of Publication: 
2016
Series/Report no.: 
EHES Working Papers in Economic History No. 100
Publisher: 
European Historical Economics Society (EHES), s.l.
Abstract: 
The Bank Restriction Act of 1797 suspended the convertibility of the Bank of England's notes into gold. The current historical consensus is that the suspension was a result of the state's need to finance the war, France's remonetization, a loss of confidence in the English country banks, and a run on the Bank of England's reserves following a landing of French troops in Wales. We argue that while these factors help us understand the timing of the Restriction period, they cannot explain its success. We deploy new long-term data which leads us to a complementary explanation: the policy succeeded thanks to the reputation of the Bank of England, achieved through a century of prudential collaboration between the Bank and the Treasury.
Subjects: 
Bank of England
financial revolution
fiat money
money supply
monetary policy commitment
reputation
and time-consistency
regime shift
financial sector growth
JEL: 
N13
N23
N43
Document Type: 
Working Paper

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