Abstract

In the autumn of 1825, Britain succumbed to a large-scale financial panic. The crisis affected production and circulation, banking and the currency, investment in overseas securities, and other sectors. A large number of businesses failed, and the credit system was severely damaged. At the same time, the crisis highlighted some of the evils of the economic system. The British government took steps to rescue the market and implemented financial reforms. Although these measures did not have much substantive effect, being unable to curb the panic, the methods used provided a store of useful experience for the future. The core content of the financial reform was the introduction of the joint-stock banking system, which laid the foundations for the modernization of the British banking industry, raised the financial system’s ability to withstand risk, and provided a financial system suited to contemporary economic development.

Published on Historical Research, Issue 5, 2017.