T4: Goldsmith banking Flashcards
why did goldsmith banking become a thing?
CI seized Royal Mint in 1640- merchants stored valuables in secure vaults of goldsmiths instead
what did goldsmith bankers do?
lent out the money they held in storage with interest
what year did CI seize the Royal Mint?
1640
where had merchants stored their valuables before 1640?
the Royal Mint
stat for number of goldsmith bankers in London?
32 in 1670
44 1677
what were goldsmith bankers able to do due to being seen as trustworthy?
borrow at 4-6% and offer short-term loans at above 6%
why was a stable banking system able to develop?
many goldsmith bankers knew each other - system based on trust and reputation
how did the Commonwealth affect the banking system?
Commonwealth attempted to regulate finance through the Hale Commission
what did the Hale Commission do?
discussed legal reforms of banking
what affect did the Hale Commission have on banking?
not a lot - discussed reforms but not acted upon
how did Charles II affect banking?
reformed banking in 1672- loans now levied from public, confiscated all funds deposited in Royal Treasury by goldsmith bankers
why did Charles II reform banking?
heavily indebted to goldsmith bankers in early 1670s
at what rate had goldsmith bankers lent to the Crown?
10% (with money they had borrowed at 6%)
what year did CII reform banking?
1672
what did Charles II do in 1672?
reform banking
