The Speed of the Financial Revolution: Evidence from Hoare’s Bank

Peter Temin and Hans-Joachim Voth

Economics Working Papers from Department of Economics and Business, Universitat Pompeu Fabra

Abstract: Finance is important for development, yet the onset of modern economic growth in Britain lagged the British financial revolution by over a century. We present evidence from a new West-End London private bank to explain this delay. Hoare’s Bank loaned primarily to a highly select and well-born clientele, although it did not discriminate against “unknown” borrowers in the early 18th century. It could not extend credit more generally because of government restrictions (usury limits) and policies (frequent wars). Britain’s financial development could have aided growth substantially, had it not been for the rigidities and turmoil introduced by government interference.

Keywords: Financial Revolution; growth; finance; rationing; usury laws; institutional evelopment; eighteenth-century England (search for similar items in EconPapers)
JEL-codes: E44 N23 N13 G21 G18 G28 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-fin, nep-fmk, nep-his and nep-mac
Date: 2005-05
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