Victorian Financial Crises and their Implications for the Future

Abstract

Banking crises were a relatively common occurrence in 19th century England. Like the Federal Reserve today, the Bank of England struggled to quell panics by acting as the lender of last resort, while at the same time maintaining monetary stability. This article surveys the events leading up to and the Bank's response to the four post-1844 crises, highlights some of the similarities between the Victorian era panics and the 2007–08 crisis, and draws on the 19th century experience to illustrate the dilemmas facing modern central banks.