the world of private banking

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THE WORLD OF PRIVAtE BANKING
a further reminder was the Baring crisis of 1890, in the wake of which Martins
became a joint-stock bank.
The exception to these patterns of business development in which ‘joint-stockism’
triumphed with the ‘Big Bang’ was City merchant banking. The finance
companies of the mid-1860s never made inroads into the kernels of their businesses
– acceptances – and only created a very limited and brief indent with regard to the
flotation of foreign sovereign loans. All in all, the business worlds of these two
outwardly competing groups of institutions hardly overlapped. The consequences
of the 1866 crisis removed any possibility of a head-on competitive collision.
Being involved in primarily foreign bills, merchant banks were less affected by
the increasing disuse of the inland bill after the early 1870s. Nonetheless, they had
competitors for the finance of foreign trade in the form of British-based corporate
overseas banks and London joint-stock banks. However, the English feature of
what Landes has previously called the ‘financial revolution’ of the mid-century
was the involvement of some members of London’s merchant banking community
(and their continental counterparts) in the creation of City-based corporate overseas
banks. This was no short-term promotional commitment, as these personal links
persisted until 1914, and not infrequently into the interwar period. Moreover, such
institutions had London joint-stock bankers on their boards by the early 1870s
and, thereby, constituted one of the few meeting places that drew members from a
number of the City’s financial markets. The fundamental importance of the ‘bread
and butter’ acceptance business for the merchant banks has long been recognized,
but its precise dimensions and contributions are only beginning to come into focus
with the very welcome series of scholarly house histories, published since 1989.
These institutions largely represented the continuing world of private banking
after the ‘Big Bang’ of the mid-century.