the world of private banking

LONDON’S FIRSt ‘BIG BANG’? 67
Figure 4.4
Bankers’ balances at the head office of the Bank of England,
quarterly averages, 1858–83, £’000s
monetary and financial crises, especially that of 1866. Repeated financial and
monetary disruption constituted one force responsible for figure 4.4’s bar chart
having a serrated upper edge, while another was cyclical fluctuations. These wavelike
movements can be more clearly displayed by removing the underlying trend,
as has been done to generate figure 4.5.
The series for bankers’ balances has been de-trended pragmatically. This
involved making ‘guess estimates’ of a rising series of minimum reserve floors, it
having been assumed that there were upward step changes in commercial banks’
reserves, a result of growing liabilities but more particularly of reactions to major
monetary disturbances. The size of these inferred changes was determined from an
inspection of the data’s behaviour. The ‘detected floors’ to bankers’ balances have
been set at £4m. from first quarter 1858 (following the 1857 crisis), at £6m. from