Overview
- Covers an important historical episode that has not been covered before in its entirety
- Charts the short but turbulent career of the Ayr Bank
- Showcases the development of crisis containment policies and the recognition that many modern financial contagion mechanisms were already well in place in the mid-18th century
Part of the book series: Palgrave Studies in the History of Finance (PSHF)
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About this book
Nowadays remembered mostly through Adam Smith’s references to the short-lived Ayr Bank in the Wealth of Nations, the 1772-3 financial crisis was an important historical episode in its own right, taking place during a pivotal period in the development of financial capitalism and coinciding with the start of the traditional industrialisation narrative. It was also one of the earliest purely financial crises occurring in peacetime, and its progress showed an impressive geographical reach, involving England, Scotland, the Netherlands and the North American colonies.
This book uses a variety of previously unpublished archival sources to question the bubble narrative usually associated with this crisis, and to identify the mechanisms of financial contagion that allowed the failure of a small private bank in London to cause rapid and severe distress throughout the 18th century financial system. It re-examines the short and turbulent career of the Ayr Bank, and concludes that itsfailure was the result of cavalier liability management akin to that of Northern Rock in 2007, rather than the poor asset quality alleged in existing literature. It furthermore argues that the Bank of England’s prompt efforts to contain the crisis are evidence of a Lender of Last Resort in action, some thirty years before the classical formulation of the concept by Henry Thornton.
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Keywords
Table of contents (6 chapters)
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Front Matter
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Back Matter
Authors and Affiliations
About the author
Paul Kosmetatos is Lecturer for International Economic History at the University of Edinburgh. Prior to embarking in his academic career in History, he studied Materials Science and Engineering and spent a decade trading financial derivatives in the City of London.
Bibliographic Information
Book Title: The 1772–73 British Credit Crisis
Authors: Paul Kosmetatos
Series Title: Palgrave Studies in the History of Finance
DOI: https://doi.org/10.1007/978-3-319-70908-6
Publisher: Palgrave Macmillan Cham
eBook Packages: Economics and Finance, Economics and Finance (R0)
Copyright Information: The Editor(s) (if applicable) and The Author(s) 2018
Hardcover ISBN: 978-3-319-70907-9Published: 03 April 2018
Softcover ISBN: 978-3-030-10001-8Published: 08 January 2019
eBook ISBN: 978-3-319-70908-6Published: 21 March 2018
Series ISSN: 2662-5164
Series E-ISSN: 2662-5172
Edition Number: 1
Number of Pages: XXIV, 334
Number of Illustrations: 36 b/w illustrations, 9 illustrations in colour
Topics: Financial History