The banking sector faced catastrophe at the end of 1825. In the two years, 1825–6, 93 banks in England and Wales found themselves unable to fulfil the most fundamental of all bankers’ obligations – they were unable to pay cash to their customers on demand. 1 It is this inauspicious episode that marks the beginning of the present account of the evolution of modern banking in the United Kingdom. The banking crisis had arisen out of more general problems facing the economy and it will be a recurrent theme that economic pressures from the non–banking world often invoked important changes in the environment in which the commercial banks had to operate.