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​The demise of Overend Gurney

Author

Listed:
  • Sowerbutts, Rhiannon

    (Bank of England)

  • Schneebalg, Marco

    (Bank of England)

  • Hubert, Florence

    (Bank of England)

Abstract

150 years ago, Overend Gurney, the largest discount house in the City of London, suspended payment. The Times immediately christened this date ‘Black Friday’ due to the financial panic that ensued. The Bank of England, a private bank at the time, refused assistance to Overend Gurney but supported the refinancing of viable banks and brokers by depleting its own reserves. This lending by the Bank of England led to valuable debates around optimal central bank lending and limited liability. There are several lessons which remain relevant today.

Suggested Citation

  • Sowerbutts, Rhiannon & Schneebalg, Marco & Hubert, Florence, 2016. "​The demise of Overend Gurney," Bank of England Quarterly Bulletin, Bank of England, vol. 56(2), pages 94-106.
    • Handle: RePEc:boe:qbullt:0198
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    File URL: https://www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2016/the-demise-of-overend-gurney.pdf?la=en&hash=04B001A02BD5ED7B35D4FB3CF1DDC233A1D271BD
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    Cited by:

    1. Tomura, Hajime, 2018. "Payment instruments and collateral in the interbank payment system," Journal of Economic Theory, Elsevier, vol. 178(C), pages 82-104.
    2. Charles R. Bean, 2019. "A Review Essay: David Kynaston's Till Time's Last Sand: A History of the Bank of England, 1694–2013," Journal of Economic Literature, American Economic Association, vol. 57(4), pages 972-987, December.
    3. Mike Anson & David Bholat & Miao Kang & Ryland Thomas, 2017. "The Bank of England as Lender of Last Resort: New historical evidence from daily transactional data," Working Papers 0117, European Historical Economics Society (EHES).
    4. Sabine Schneider, 2022. "The politics of last resort lending and the Overend & Gurney crisis of 1866," Economic History Review, Economic History Society, vol. 75(2), pages 579-600, May.

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