The Speed of the Financial Revolution: Evidence from Hoare's Bank

50 Pages Posted: 13 Apr 2004

See all articles by Hans-Joachim Voth

Hans-Joachim Voth

University of Zurich - UBS International Center of Economics in Society; Centre for Economic Policy Research (CEPR)

Peter Temin

Massachusetts Institute of Technology (MIT) - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: March 2004

Abstract

Finance is important for development, yet the onset of modern economic growth in Britain lagged the British financial revolution by over a century. We present evidence from a new West-End London private bank to explain this delay. Hoare's Bank loaned primarily to a highly select and well-born clientele, although it did not discriminate against "unknown" borrowers in the early 18th century. It could not extend credit more generally because of government restrictions (usury limits) and policies (frequent wars). Britain's financial development could have aided growth substantially, had it not been for the rigidities and turmoil introduced by government interference.

Keywords: Financial Revolution, growth, finance, rationing, usury laws, institutional evelopment, eighteenth-century England

JEL Classification: E44, N23, N13, G21, G18, G28

Suggested Citation

Voth, Hans-Joachim and Temin, Peter, The Speed of the Financial Revolution: Evidence from Hoare's Bank (March 2004). MIT Department of Economics Working Paper No. 04-12. Available at SSRN: https://ssrn.com/abstract=516142 or http://dx.doi.org/10.2139/ssrn.516142

Hans-Joachim Voth

University of Zurich - UBS International Center of Economics in Society ( email )

Raemistrasse 71
Zuerich, 8006
Switzerland

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Peter Temin (Contact Author)

Massachusetts Institute of Technology (MIT) - Department of Economics ( email )

50 Memorial Drive
E52-280a
Cambridge, MA 02142
United States
617-253-3126 (Phone)
617-253-6915 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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