the world of private banking

LONDON’S FIRSt ‘BIG BANG’? 65
Figure 4.3
Interest rate on 3 month bank bills
the trough of the late 1870s and the initiation during the early 1880s of what proved
to be a second long swing that crested in 1890.
The mid-century inception of Britain’s becoming the world supplier of capital
provided new opportunities for merchant banks, both established houses and
newcomers to the City. The accumulation of further foreign capital assets also had
direct and indirect effects for British overseas and domestic corporate banks.
The decline of the inland bill from 1873 and the onset of the British economy’s
becoming a ‘chronic’ exporter of capital are both features of the mid-century financial
transition. This occurred against the background of a far-from-benign monetary
environment. The tempestuous nature of the mid-Victorian decades, especially the
1860s, is clearly displayed in the available quarterly data. Figure 4.3 displays the
interest rate on 3-month bank bills, a time series with a staccato rhythm. Also shown
Calculated from the weekly series compiled in Nishimura, Decline of Inland Bills,
Table 30, pp. 114–28.