Introduction

The previous chapter established that there were major banking crises in the United Kingdom in 1825–6 and 2007–8 and that in the interim period, there was a series of what we termed minor crises (i.e., 1836–7, 1847, 1857–8, 1866–7, 1878–9 and 1974). In this chapter, we develop narrative accounts of these major and minor crises. The main reasons for doing so are twofold.

First, we need a qualitative idea of the extent and scale of these crises to confirm (or otherwise) the results from the quantitative measures of stability developed in Chapter 3. In particular, we explore how each crisis developed and analyse anecdotal evidence of its severity. In addition, to understand why they failed, we examine the major institutions that experienced difficulties or failed during each crisis episode.

Second, we want to examine the possible triggers for and precursors to each crisis. Because easy monetary and credit conditions and speculation are important elements of both the Kindleberger and Minsky explanations for crises, we examine monetary and credit conditions in the run-up to each crisis and also consider whether speculation in assets of various types preceded each crisis.