That meant that the Americans were no longer respecting their role or playing their role governing the monetary system. They were inflating their currency that ostensibly was meant to be tied, tied to gold and to every other currency. So what did the French do?
In the 1840s they pushed it just a little bit too far and that caused inflation, destabilised the economy.
So in 1844, the Conservative Government of Robert Peel actually passed a law that took the power to create money away from the commercial banks and brought it back to the state.
So since then the Bank of England has been the only organisation authorised to create paper notes.
Since then everything has gone digital and what we now use as money is the digital numbers that commercial banks can create out of nothing.
The problem was that they did not include in that legislation the deposits, the demand deposits, held in banks by individuals or electronic forms of money which essentially is what those deposits are.
By 2010 the ratio had risen to 1:37.
That is, for every pound of Treasury-created money, there were 37 pounds of bank-created money.
In the 10 years prior to the 2007 crisis, the UK commercial bank money supply expanded by between 7 to 10% every year.
A growth rate of 7% is the equivalent of doubling the money supply every 10 years.
The amount of money they're creating out of nothing is just incredible, 1.2 trillion in the last 10 years.
September 2007. Thousands of Northern Rock customers queue up to withdraw their cash. The company had been forced to seek emergency funding. It's the first run on a British bank in 140 years. Northern Rock had committed to asset (mortgage) purchases, but was unable to sell securitised assets to meet these obligations.
When we talk to businesses, they get it pretty intuitively. Governments often shut down these experiments The Bank of England may of course decide that this is a threat to the stability of sterling. At the moment they are reserving their right to take an opinion on it. They've sent us all their rules and regulations and we've got a team of lawyers to give loads of work pro bono, to say, "Right, we'll work on this and we'll make it as watertight as we possibly can.
Credit organizations do not always issue loans. If the bank refused, the question arises, what is needed to take out a loan and how to increase the chances of approval. When considering applications, the bank pays attention to the following nuances:
The client can apply to several institutions at the same time, and after receiving approval, choose the most profitable option for himself.
Similarly, after the advent of paper money and the gold standard, the exchange rate depended on the amount of gold the government promised to pay the holder of the bank notes. These amounts did not vary greatly in the short term, and, as such, exchange rates between currencies were relatively stable.