T4: Banking

Question 1

when was the Royal Exchange opened and by whom?

Answer 1

1571 by Sir Thomas Gresham

Question 2

who was Thomas Gresham?

Answer 2

A broker, opened the Royal Exchange in 1571

Question 3

what led lending to grow?

Answer 3

interest rates lowered

Question 4

statistics for the lowering of interest rates?

Answer 4

1571-1624: 10%
1624-1651: 8%
1651-1714: 6%

Question 5

what was the impact of interest rates lowering?

Answer 5

lending became more widespread

Question 6

who would initially provide credit?

Answer 6

brokers and banks

Question 7

as demand for loans increased, what did brokers do?

Answer 7

brokers established networks of people who could provide money for loans

Question 8

how did the market rate for a good loan change?

Answer 8

1640: market rate for good loan = 8% (legal limit)
1688: 4-6% (below legal limit)

Question 9

how transformative was banking to the economy?

Answer 9

partially transformative - continuation of what began in Elizabethan period, although expanded.
most of population did not have access to banking, especially rural areas