Critical Perspectives on the Evolution of American and British Banking
Edited by Matthew Hollow, Folarin Akinbami and Ranald Michie
Chapter 7: Directors in the dock: joint-stock banks and the criminal law in nineteenth-century Britain
This chapter explores the regulation of banks in nineteenth-century Britain. But rather than focusing on the familiar chain of legislation from the 1826 statute permitting joint-stock banking outside London to the act of 1879 which encouraged these banks to restrict their liability, the chapter looks instead at the criminal law. While the criminal law played little part in regulating banking in the years immediately following the legalization of joint-stock banks, high-profile failures and frauds encouraged lawyers and legislators to see a role for criminal sanctions from mid century. This chapter explores the gradual process of criminalization, showing that while London scandals were important, cases from across the UK, including Scotland and Jersey, influenced the direction of the law. And though judges did not interpret the law consistently, the trend was towards a more rigorous application of the criminal law both to bankers and company managements more generally. The result was that by the end of the century, the criminal law had become an important element in the regulatory mix, helping to stabilize the economy in times of crisis and defining the limits of acceptable practice. The chapter concludes by placing this history in the context of the financial crisis of 2007–08. It argues that recent efforts to criminalize ‘reckless’ banking notwithstanding, what has been lacking in the aftermath of the crisis is not suitable legislation to punish wrongdoers, but the political will to enforce existing laws.
You are not authenticated to view the full text of this chapter or article.
Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.
Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.
Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.