The Demise of Overend Gurney

13 Pages Posted: 18 Jul 2016

See all articles by Rhiannon Sowerbutts

Rhiannon Sowerbutts

Bank of England

Marco Schneebalg

Bank of England

Florence Hubert

Bank of England - Monetary Analysis

Date Written: July 12, 2016

Abstract

150 years ago, Overend Gurney, the largest discount house in the City of London, suspended payment. The Times immediately christened this date ‘Black Friday’ due to the financial panic that ensued.

The Bank of England, a private bank at the time, refused assistance to Overend Gurney but supported the refinancing of viable banks and brokers by depleting its own reserves. This lending by the Bank of England led to valuable debates around optimal central bank lending and limited liability. There are several lessons which remain relevant today.

Suggested Citation

Sowerbutts, Rhiannon and Schneebalg, Marco and Hubert, Florence, The Demise of Overend Gurney (July 12, 2016). Bank of England Quarterly Bulletin 2016 Q2. Available at SSRN: https://ssrn.com/abstract=2810991

Rhiannon Sowerbutts (Contact Author)

Bank of England ( email )

Threadneedle Street
London, EC2R 8AH
United Kingdom

Marco Schneebalg

Bank of England ( email )

Threadneedle Street
London, EC2R 8AH
United Kingdom

Florence Hubert

Bank of England - Monetary Analysis ( email )

Threadneedle Street
London EC2R 8AH
United Kingdom

Register to save articles to
your library

Register

Paper statistics

Downloads
27
Abstract Views
295
PlumX Metrics