ABSTRACT
Throughout the eighteenth century the Scottish system of banking was highly innovative and relatively free from failure. The Scottish economist Adam Smith spoke highly of the contribution which it made to economic growth. In the 1820s and 1830s the English and Irish systems experienced a series of crises which led them to adopt the Scottish model. By 1845, when legislation was passed which effectively prohibited the formation of new banks, the system in Scotland was highly homogeneous. Most of the banks were large-scale joint stock organisations with extensive branch networks and widespread note issues. By contrast most of the English banks were still small scale with small branch networks.
