Mergers in the 1950–60s left four main banks: Bank of Ireland and Allied Irish Banks based in the Republic of Ireland; Northern Bank and Ulster Bank based in Northern Ireland (subsidiaries of British banks). Rapid expansion of lending from the later 20th century left many banks and other financial institutions potentially insolvent when a financial crisis erupted in 2008. The Republic’s government was forced to guarantee deposits and nationalize companies, including Anglo‐Irish Bank, Allied Irish Banks and Bank of Ireland. See also CURRENCY, IRELAND FROM 16TH CENTURY.
BANKING, SCOTLAND
The first bank, the Bank of Scotland (in EDINBURGH), was incorporated by Scotland’s Parliament in 1695 with a 21‐year monopoly. Its purpose was to encourage commerce by expanding credit (gold and silver coins were scarce). It discounted bills, lent money, and from 1704 issued notes. Two similar banks followed (founded by royal charter): Royal Bank of Scotland (1727) and British Linen Company (1746), the latter to promote the linen industry but which specialized in banking and pioneered a branch network. From 1747 banks were also founded in provincial centres, notably GLASGOW. Financed mainly by merchants, they provided services for trade, agriculture and industry, including cash accounts (overdrafts), deposit accounts, and note issuing. (Parliament’s prohibition on joint‐stock companies in 1720 was not applied in Scotland.) By 1826 there were 36 banks. In 1810 Henry Duncan, minister of Ruthwell (Dumfriesshire), founded a parish savings bank for the poor. His idea spread: by 1818 there were 182 such banks (see SAVINGS BANKS).
In the 1840s restrictive legislation halted expansion and encouraged conservatism: the 1844 Bank Charter Act effectively prevented new banks from issuing notes; from 1845 note issuing beyond an authorized amount had to be backed by specie. Crashes (e.g., large Western Bank in 1857) and amalgamations reduced numbers: to ten by 1878, eight by 1914, five by 1958, three by 1971 (Bank of Scotland, Royal Bank of Scotland, Clydesdale Bank, founded 1838 and owned by Midland Bank since 1920). Categorized from 1971 as ‘clearing banks', in the 1970s–90s they developed business both within and outside Scotland.
From the late 1990s Royal Bank of Scotland expanded rapidly, briefly becoming the world’s largest bank, and in 2001 Bank of Scotland merged with Halifax Building Society as HBOS. But in 2008 both faced collapse. The former was taken largely into government ownership, and the latter was acquired by Lloyds (2009) with government support. See also CURRENCY, SCOTLAND.
BANKING SCHOOLsee CURRENCY SCHOOLBANK OF ENGLAND
Originally a JOINT‐STOCK COMPANY incorporated in 1694 by royal charter, comprising subscribers to a £1.2 million loan to the English government (for funding the War of the GRAND ALLIANCE). Enlarged from 1696, the Bank became the government’s main source of short‐term loans and its own bank (e.g., holding balances, providing bullion for CURRENCY), and also London’s leading bank. It enjoyed a monopoly of joint‐stock banking in England and Wales (1697–1826), was the leading issuer of notes, discounted bills of exchange (contracts for payments), and provided accounts to other banks. From 1763 (financial crisis), it was regarded as ‘lender of last resort’. Its support for other banks gave it considerable influence, a situation enhanced from 1797 when convertibility of its notes into gold was suspended, compelling other banks to hold its notes as reserves.
When convertibility was restored in 1821, the Bank operated the GOLD STANDARD to encourage economic stability. After a financial crisis in 1825, it opened provincial branches to improve the distribution of notes and sovereigns. Crises in 1836 and 1839 resulted in the BANK CHARTER ACT (1844) which encouraged a monopoly in England and Wales for Bank of England notes, and regulated note issue. The Bank was now effectively a British ‘central bank’. A liaison committee with other banks was formally established in 1911. In the later 19th and early 20th centuries the Bank exerted influence internationally through London’s world pre‐eminence as a financial centre.
Following suspension of convertibility in 1919 (after WORLD WAR I), the gold standard was restored in 1925, only to be abandoned in 1931. Nationalization of the Bank (1 March 1946) enabled central government from the 1950s to use the BANK RATE for its monetary policy. Control was redelegated to the Bank in 1997, though another authority undertook supervision of banks and insurance companies (restored 2013). See also FINANCIAL REVOLUTION; BANKING, ENGLAND AND WALES.
BANK OF IRELANDsee BANKING, IRELANDBANK OF SCOTLANDsee BANKING, SCOTLANDBANK RATEOriginally the ‘discount rate’ of the BANK OF ENGLAND (for discounting bills of exchange, 18th–19th centuries), normally above other rates. From the 1860s to 1930s it protected gold and other UK reserves (by attracting inflows at a high interest rate), and from the 1950s was part of government monetary policy (influencing commercial interest rates and general economic activity). Replaced Oct. 1972 by ‘minimum lending rate’, to encourage competition among banks. See also GOLD STANDARD.BANKS, JOSEPH
(b. 13 Feb. 1743 at London, England; d. 19 June 1820 at Isleworth, Middlesex, England, aged 77). Interested in botany from school days, Banks attended OXFORD University. The inheritance of an estate soon afterwards (1764) enabled him to pursue natural history. Encouraged by Daniel Solander, a follower of the Swedish botanist Linnaeus, Banks participated in three overseas expeditions as a naturalist: to NEWFOUNDLAND and Labrador (1766), around the world with James COOK (1768–71), and to Iceland (1772). In 1766 he was elected a fellow of the ROYAL SOCIETY.
Banks created an outstanding herbarium (collection of dried plants, now at the Natural History Museum, London). From 1773, as effectively the director, he made the Royal Botanical Gardens at Kew (Surrey) a leading research centre. As the longest serving president of the Royal Society (1778 to death), Banks encouraged the exchange of scientific ideas within Great Britain and overseas. He was created a baronet (1781).
BANNOCKBURN, BATTLE OFFought S of STIRLING (C Scotland) on 23–24 June 1314. About 8000 Scots under King ROBERT I defeated about 17,000 English under King EDWARD II. The English were seeking to prevent the surrender of Stirling Castle (a last English stronghold in Scotland). Robert afterwards dealt with his enemies in Scotland (see CAMBUSKENNETH PARLIAMENT). The defeat worsened Edward's position in England, although England withheld recognition of Scotland's independence (until 1328). See also SCOTTISH–ENGLISH RELATIONS 1290 TO 1357.BAPTISTS, ENGLAND
Protestant Christian DISSENTERS who practise baptism of adult believers (not infants). Influenced by John Smyth (d. 1612), who rebaptized himself, English Baptists established a church in LONDON in 1612. From 1633 they divided into General and Particular Baptists, the latter adhering to CALVINISM. Baptists contributed to radical politics in the mid 17th century (see ENGLISH REVOLUTION SECTS). They were persecuted after the RESTORATION (1660) but granted freedom of worship by the TOLERATION ACT (1689).
Numbers declined from the early 18th century. Congregations formed county associations from 1764. In 1770, after many congregations had drifted into UNITARIANISM, evangelical General Baptists created the New Connexion. In 1790 there were 2800 New Connexion and 17,000 Particular Baptists. The latter created a General Union in 1813.
Baptists increased rapidly in the 19th century, sustained by prominent preachers such as C.H. Spurgeon (1834–92). In 1891 the General Union and New Connexion formed the Baptist Union of Great Britain and Ireland. English membership peaked in 1907 at almost 268,000 (attendance at services differed). Membership then declined to 173,000 in 1970, 130,000 in 2010. See also NONCONFORMITY AND DISSENT, ENGLAND.
BAPTISTS, IRELANDsee NONCONFORMITY AND DISSENT, IRELANDBAPTISTS, SCOTLANDsee DISSENT, SCOTLANDBAPTISTS, WALESsee NONCONFORMITY AND DISSENT, WALESBARBADOS
An island and former English colony