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Making the market: Trading debt at the Eighteenth-Century Bank of England

Anne L. Murphy

No 14-05, eabh Papers from The European Association for Banking and Financial History (EABH)

Abstract: As the market for the trading of the British state's debt developed during the eighteenth century, the Bank of England found itself in a difficult position. It was the self-styled guardian of public credit, an institution which stood aloof as mediator between the state and its creditors, and, at the same time, the location of a market that was often criticized for its supposed attempts to undermine the stability of the state. The Bank dealt with this seeming contradiction by attempting to create both physical and commercial separation between the business of managing the public credit and the business of trading the government's debt. This paper will show that these attempts were largely unsuccessful but that the implications of those failures for the credibility of Britain's public finances were not entirely negative.

Keywords: Bank of England; credible commitment; financial markets; sovereign debt (search for similar items in EconPapers)
JEL-codes: N23 G14 G21 H63 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-his and nep-hpe
Date: 2014
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