From Crisis to Crisis

From Crisis to Crisis examines the impact on the British merchant banks of the harsh conditions of the interwar economy. The financial crises of 1914 and 1931 are assessed using data from primary sources. The competitive threats, including the rise of New York as a rival financial centre, are considered. It challenges their alleged special treatment and provides fresh perspectives on their role in the rationalisation of industry. During the late nineteenth century, Britain's merchant banks had become pre-eminent in a world of fixed exchange rates, free trade and the unfettered mobility of international capital. This world was increasingly challenged in the interwar period, and was eventually replaced by floating exchange rates, trade protectionism and restrictions on capital movements. This book aims to fill a gap in the historiography of British banking by recovering the histories of long-forgotten merchant banking firms rather than solely focusing on the better-known firms. Using a wide range of archival resources, it traces the strategic transformation by some merchant banks from higher-risk, capital intensive activities to lower-risk, advisory services. This transformation continued in the second half of the 20th century, but it had its origins in the 1920s and 1930s.