Banking as an Emerging Technology: Hoare's Bank 1702-1742

Abstract

Analysis of the financial revolution in England has often focused on changes in public debt management and the interest rates paid by the state. Much less is known about the evolution of the financial system providing credit to individual borrowers. We document the transition from goldsmith to banker in the case of Richard Hoare, and examine the operation of the loan market during the early eighteenth century. Learning how to use the relatively new technology of deposit banking was crucial for the bank's success and survival. Innovation during the early stages of the British Industrial Revolution was not limited to manufacturing and transport, but played a critical role also in the service sector.

Keywords: Banking and credit, English Industrial Revolution, interest rate determination, credit rationing, technological change and learning

JEL Classification: G21, N23, N83, O16, O31