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State Cash Resources and State Building in Europe 13th-18th century

Katia Béguin
Anne L. Murphy

Markets for Public Debt Securities

Compromised Credibility: the Problems of Trading Debt at the Eighteenth-Century Bank of England

Anne L. Murphy

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Extrait du texte


The market is a key element of any financial system. If functioning well it allows those in need of finance, be they individuals, business or governments, to locate savers seeking investment opportunities, it facilitates the secondary transfer of already-issued securities, it can reduce costs, help to spread and control risk, and it can facilitate the flow of information. Without a market lenders and borrowers would have to locate each other, a process that in all likelihood would be costly and time-consuming and may result in projects going under- or unfunded.

For the market in government debt during the long eighteenth century, low transaction costs, liquidity and good information flow were not just desirable, they were key to creating the stability and credibility which allowed successive governments to borrow to fund the wars fought in the period between 1689 and 1815.1 This is not just the view formed with the advantage of hindsight. Contemporaries also understood t...


Anne L. Murphy is Reader in History at the University of Hertfordshire. Her research focuses on eighteenth-century British financial markets and institutions. She is particularly interested in the role of the Bank of England as intermediary between the state and its creditors. She has recently published: ‘Demanding credible commitment: public reactions to the failures of the early financial revolution’, Economic History Review, 66, 2013, pp. 178–197; The origins of the English financial markets, Cambridge, Cambridge University Press, 2009 (paperback, 2012); ‘Learning the business of banking: the recruitment and training of the Bank of England’s first tellers’, Business History, 52, 2010, pp. 150–168; ’Trading options before Black-Scholes: a study of the market in late seventeenth-century London’, Economic History Review, 62, 2009, pp. 8–30.

© Institut de la gestion publique et du développement économique, 2017

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