The Bank of England and the government debt : operations in the gilt-edged market, 1928-1972 / William A. Allen.
- Cambridge, United Kingdom ; New York, NY, USA : Cambridge University Press, 2019.
- Studies in macroeconomic history.
Studies in macroeconomic history
xiv, 260 pages ; 24 cm.
- Bank of England -- History -- 20th century.
Bank of England.
Monetary policy -- Great Britain -- History -- 20th century.
Banks and banking, Central -- Great Britain -- History -- 20th century.
Debts, Public -- Great Britain -- History -- 20th century.
Banks and banking, Central.
- "The Bank of England and the Government Debtrecounts the surprising history of the Bank of England's activities in the government securities market in the mid-twentieth century. The Bank's governor, Montagu Norman, had a decisive influence on government debt management policy until he retired in 1944, and established an auxiliary market in government securities outside the Stock Exchange during the Second World War. From the early 1950s, the Bank, concerned about inadequate market liquidity, became an increasingly active market-maker in government securities, rescuing the commercial market-makers in the Stock Exchange several times. The Bank's market-making activities often conflicted with its monetary policy objectives, and in 1971, it curtailed them substantially, while avoiding the damaging effects on liquidity in the government securities market that it had feared. Drawing heavily on archival research, William A. Allen sheds light on little-known aspects of central-banking and monetary policy"-- Provided by publisher.
"Government securities are an essential piece of equipment for an effective state. They enable governments to borrow to finance expenditures which they cannot mmediately pay for out of taxation or accumulated savings. In the past, such xpenditures were often for the conduct of wars. Britain was able to raise more money than France to fight the Napoleonic Wars because it had better arrangements for government borrowing. Governments which could not borrow have often resorted to creating money, which its citizens are forced to accept as payment, leading to serious inflation; that is why wars are frequently accompanied by inflation. This book is largely the story of how the market for United Kingdom government bonds - known as gilt-edged or gilts - developed in the middle of the twentieth century, of how the monetary authorities tried to compensate for its deficiencies, and of how they overcame the unintended consequences of their actions"-- Provided by publisher.
Price and quantity discovery, market making and liquidity in the gilt market
Government securities and the structure of the stock exchange
Government debt management before 1928
The gilt market and the Issue Department 1928-39
Government debt management and the gilt market in the Second World War
The gilt market from the reactivation of monetary policy until 1960
Gilt market liquidity in the 1960s
The high tide of intervention: 1960-66
The conflict with monetary policy recognised and addressed: 1967-70
Competition and credit control, 1970-72
The Bank of England's contribution to market liquidity
Governance in practice
Epilogue: bearing the cost of providing liquidity.
- Includes bibliographical references and index.
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