Each day, Benzinga takes a look back at a notable market-related moment that occurred on this date.
What Happened? On this day in 1694, the U.K. central bank, the Bank of England, was founded.
What Else Was Going On In The World? In 1694, the French Navy defeated Spain in the Battle of Torroella. The Parliament of England passed the Triennial Act, which required general elections every three years. The oldest available interest rate data from 1694 indicates annual rates of 6 percent.
British Central Bank: The Bank of England was formed in July 1694 and predates the formation of the United Kingdom, which occurred in 1707.
After the British Navy was defeated by the French in the Battle of Beachy Head in 1690, England needed to borrow 1.2 million pounds to rebuild its fleet. Those tasked with raising the funds incorporated as the Governor and Company of the Bank of England and were given exclusive access to the government’s balance sheets and exclusive rights to issue bank notes. Lenders exchanged bullion for bank notes, and the necessary funds were raised in just 12 days.
The Bank of England remained on the gold standard until 1931. Today, the Bank of England, the U.S. Federal Reserve, the Bank of Japan, and the European Central Bank are collectively known as the “Big Four Banks” due to their international influence and monetary policy powers.
Public domain photo via Wikimedia.