 Danger To The Old Lady Of Threadneedle Street? The Bank Restriction Act And The Regime Shift To Paper Money, 1797-18211Patrick K. O’Brien and Nuno Palma No 82, Working Papers from Utrecht University, Centre for Global Economic History Abstract: The Bank Restriction Act of 1797 was the unconventional monetary policy of its time. It suspended the convertibility of the Bank of England's notes into gold, a policy which lasted until 1821. The current historical consensus is that it 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 suspension, 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. Keywords: Bank of England; financial revolution; fiat money; money supply; monetary policy commitment; reputation; time-consistency; regime shift (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ucg:wpaper:0082 Access Statistics for this paper More papers in Working Papers from Utrecht University, Centre for Global Economic History University of Utrecht, Drift 10, The Netherlands. Contact information at EDIRC. |
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