The Apple Doesn't Fall Far from the Tree: English Bank Regulation and Branching Strategies in the Nineteenth Century

After the Bank Charter Act in 1833, English banks could branch nationally without legal or geographical restriction. Many new joint stock banks took this opportunity to branch and thus created the foundation for modern branch banking in the UK. Drawing upon a new dataset, this article maps the locations of joint-stock banks and their branches. Bank size and spread demonstrate that many branched vigorously but stopped at the creation of local or multiregional structures. Our research shows that branching strategies were influenced by ‘soft’ Parliamentary pressure (but not regulation), prominent branch bank failures and a lack of managerial expertise.

[1]  J. Turner,et al.  The death blow to unlimited liability in Victorian Britain: The City of Glasgow failure , 2008 .

[2]  W. Acres.  The Bank of England from within, 1694-1900 , 1931 .

[3]  E. Perkins,et al.  Insider Lending: Banks, Personal Connections, and Economic Development in Industrial New England. , 1995 .

[4]  R. S. Sayers,et al.  A Hundred Years of Joint-Stock Banking. , 1936 .

[5]  G. Klein,et al.  The Business of Banking , 1996, Principles of Banking Regulation.

[6]  Country Banking in the Industrial Revolution. , 1956 .

[7]  E. Prescott,et al.  Sequential location among firms with foresight , 1977 .

[8]  R. S. Sayers,et al.  Lloyds Bank in the history of English banking , 1958 .

[9]  Allen N. Berger,et al.  Entry into Banking Markets and the Early-Mover Advantage , 2007 .

[10]  B. David.  The iron cage revisited : Institutional isomorphism and collec... , 2007 .

[11]  L. Newton.  Regional Bank–Industry Relations during the Mid-Nineteenth Century: Links between Bankers and Manufacturing in Sheffield, c.1850 to c.1885 1 , 1996 .

[12]  John Railton,et al.  Banking and finance , 1986, Comput. Law Secur. Rev..

[13]  K. Ward,et al.  Banking from Leeds, not London: regional strategy and structure at the Yorkshire Bank, 1859–1952 , 2010 .

[14]  E. Green.  Debtors to their Profession : A History of the Institute of Bankers 1879-1979 , 1979 .

[15]  P. L. Cottrell,et al.  Joint-Stock Banking in the English Provinces 1826-1857 : To Branch or Not to Branch ? , 2003 .

[16]  D. B. Montgomery,et al.  First‐mover advantages , 1988 .

[17]  Charles R. Hickson,et al.  Does Limited Liability Matter? Evidence From Nineteenth-Century British Banking , 2010 .

[18]  J. Turner.  ‘The last acre and sixpence’: views on bank liability regimes in nineteenth-century Britain , 2009, Financial History Review.

[19]  J. Turner.  Wider Share Ownership?: Investors in English and Welsh Bank Shares in the Nineteenth Century , 2009 .

[20]  Terry L. Amburgey,et al.  Strategic momentum: The effects of repetitive, positional, and contextual momentum on merger activity , 1992 .

[21]  R. Grossman.  Unsettled Account: The Evolution of Banking in the Industrialized World since 1800 , 2010 .

[22]  N. Lamoreaux.  Insider lending: The merger movement in banking , 1994 .

[23]  W. Powell,et al.  The iron cage revisited institutional isomorphism and collective rationality in organizational fields , 1983 .

[24]  C. Munn.  The Scottish Provincial Banking Companies 1747-1864 , 1981 .

[25]  Frederick Lavington,et al.  The English capital market , 1921 .

[26]  Forrest H. Capie,et al.  Industrial Lending by English Commercial Banks, 1860s–1914: Why Did Banks Refuse Loans? , 1996 .

[27]  R. Schmalensee.  Entry Deterrence in the Ready-to-Eat Breakfast Cereal Industry , 1978 .

[28]  Henrich R. Greve,et al.  Marketing Niche Entry Decisions: Competition, Learning, and Strategy in Tokyo Banking, 1894–1936 , 2000 .

[29]  C. Munn.  The Emergence of Joint-Stock Banking in the British Isles a Comparative Approach , 1988 .

[30]  R. Morris,et al.  Atlas of Industrializing Britain, 1780-1914 , 1987 .

[31]  James Taylor.  Creating Capitalism: Joint-Stock Enterprise in British Politics and Culture, 1800-1870 , 2014 .

[32]  T. Joplin.  An examination of the report of the Joint Stock Bank Committee, &c.&c : to which is added an account of the late pressure in the money market, and embarranssment of the Northern and Central Bank of England , 2011 .

[33]  M. Collins.  The banking crisis of 1878 , 1989 .

[34]  K. Blake.  Genres of the Credit Economy: Mediating Value in Eighteenth and Nineteenth-Century Britain , 2009 .

[35]  E. White.  The Merger Movement in Banking, 1919–1933 , 1985, The Journal of Economic History.

[36]  Robert Woods,et al.  Population and regional development , 2004 .

[37]  C. Hunt.  The Joint-Stock Company in England, 1830-1844 , 1935, Journal of Political Economy.

[38]  J. Sykes,et al.  The Amalgamation Movement in English Banking. , 1926 .

[39]  Pat Hudson.  The Role of Banks in the Finance of the West Yorkshire Wool Textile Industry, c. 1780–1850 , 1981, Business History Review.

[40]  G. Bell.  The Philosophy of Joint Stock Banking , 2009 .

[41]  M. Collins,et al.  Commercial Banks and Industrial Finance in England and Wales, 1860-1913 , 2004 .

[42]  Gholamreza Nakhaeizadeh,et al.  Banking and finance , 2002 .

[43]  Astrid A. Dick,et al.  Market Size, Service Quality, and Competition in Banking , 2007 .

[44]  Lawrence H. White.  A History of Banking in Antebellum America: Financial Markets and Economic Development in an Era of Nation-Building , 2001 .