Significance of banks in Britain

BANKS IN BRITAIN

Banking started in the 17th century with the first activity done by goldsmiths who after dissolution of English monasteries by Henry VIII, began to accumulate significant stocks of gold. Goldsmiths were known as “keepers of cash”. They accepted gold in exchange for a receipt as well as accepting written instructions to pay back.

Around 1650, a cloth merchant, Thomas Smith opened the first provincial bank in Nottingham. In 1694, Bank of England was founded. The governor and company of the Bank of Scotland were established by an Act of Parliament of Scotland on 17th July, 1695.

The Bank of Scotland was established to support Scottish business and was prohibited to lend to government without parliamentary approval. During the 18th century bank services increased.

An Act of Parliament in 1708 restricted banks with more than 6 partners from issuing bank notes. This was aimed at keeping private banks as small partnerships.

Industrial revolution and growing international trade increased number of banks especially in London. Merchant banks were started even outside London especially in growing industrial and port cities like Manchester, Birmingham, Newcastle and Liverpool.

By 1784, there were more than 100 provincial banks. Currently all banks have refined their services with most offering similar services, with only different interest rates.

The bank regulations have created transparency among stakeholders such as between banking institutions and individuals they conduct business with.

The Islamic Bank of Britain also provides services to Muslims in England following the Sharia Law. Other banks such as Lloyd’s Banking Group, Barclays, Standard Chartered, and Bank of Scotland offer services to the rest of the public. With your money safe in England, why stress about anything?

History, causes and consequences of global financial crisis

Short essay on history of banks in the US and UK

Banks in both the United States and the United Kingdom started as financial institutions with a few customers banking their money for safety purposes. Some started off so small that one would not believe the growth that has been witnessed over the years in the banking industry.

Lending rates as well as services offered to customers differed then and still do even to date. When the US became independent nation, for example, it did not have a central bank. A central bank’s most important jobs are to guard the money supply regulating the economy and to act as the lender to regular banks in times of distress.

The countries’ presidents impacted the development of banking institutions. An example is Jefferson in the US who hated commerce and banks as a whole. The first bank’s establishment was advocated by Hamilton and was established in 1792.

The Bank of the United States was a big success and provided the country with regular supply of money. In the early days, the federal government created money both through making loans and by issuing banknotes. Today, they do so by extending credit.

In the UK, the first activity that later came to be known as banking was by goldsmiths who after the dissolution of English monasteries began to accumulate significant stocks of gold.

The goldsmiths later came to be known as keepers of ‘running cash’ and accepted gold in exchange for a receipt around 1650, the first provincial bank was established and in 1694, the Bank of England was formed. Services offered by banks in the US and UK generally increased in the 18th and 19th centuries due to development of the Industrial revolution and international Trade.