ABSTRACT
The Bank of England, as it took shape in 1694, used monetary innovation to align public needs (for war loans long- and short-term) with private opportunities (for an unusually high rate of return to shareholders in the new venture). In this chapter I describe in some detail the Bank’s basic design and its early business operations. This will enable us to better appreciate the nature of several other banking projects that came to the fore in the next few years (projects that played a vital role in the politics of the recoinage) and to grasp a key vulnerability in the Bank’s operations (one that both the Treasury and the Bank’s opponents would soon use to their own ends).
