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The Bank of England came to the rescue on Sunday 10 January, allowing anyone who wished to withdraw specie from the bank to do so. Many British merchants quickly sent money to their ailing Dutch correspondents. [26] The strain upon the reserves of the Bank of England was not eased until towards the end of 1773.
The crisis deepened when the Bank of England suspended specie payments on February 25, 1797 under the Bank Restriction Act 1797. The bank's directors feared insolvency when English account holders, who were nervous about a possible French invasion, began withdrawing their deposits in sterling rather than bank notes.
The Bank Rate had been increased in September 1957, but rumours rapidly circulated around the City of London that some financiers - who simultaneously held positions within the Bank of England and within private financial companies - took advantage of advance warning of the rate rise to sell gilt-edged securities ahead of the public announcement.
Panic of 1819, a U.S. recession with bank failures; culmination of U.S.'s first boom-to-bust economic cycle; Panic of 1825, a pervasive British recession in which many banks failed, nearly including the Bank of England; Panic of 1837, a U.S. recession with bank failures, followed by a 5-year depression; Panic of 1847, United Kingdom
The self-interest of the Bank of England thereby caused additional failures. Although banker Henry Thornton described in 1802 the proper lender of last resort actions to be taken by a central bank in such a crisis, it was not until the Overend Gurney crisis of 1866 that the Bank of England would take action to prevent widespread panic ...
From 21 January to 28 February 1873, four American con-artists defrauded the Bank of England of £102,217, [1] equivalent to nearly £10 million in 2015. [2] The four men responsible for the Bank of England forgeries, brothers George and Austin Bidwell, George MacDonnell and Edwin Noyes were convicted at the Old Bailey and sentenced to life imprisonment. [1]
The Bank of England adopted Bagehot's solution, which was an explicit policy of free offers to lend at high discount rates. This policy rebuilt the Bank's reserves. [13] It also moderated and refined its use of monetary policy to influence capital flows in and out of the United Kingdom. [14] [15]
The Bank of England and the British currency were therefore at risk from drains of gold leaving the country or being withdrawn internally, which reduced the backing for its banknotes. In 1847, heavy drains occurred, and the Act was 'suspended' when the Bank of England was presented with a letter from the government indemnifying the Bank for a ...