The Authorized Version: The Recent Installment in the History of the Bank of England

Extract

This book is a worthy successor to those commissioned by the Bank of England that cover its history from its foundation in 1694. It is written by an expert, is thoroughly researched, and provides a wealth of evidence to support the judicious conclusions that are drawn. The discussion ranges from the highly technical to the narrative, indicating the command that Harold James has over his subject. For the period it covers it will become the authorized version of what the Bank of England did and why, covering the details of how it operated as a complex organization and the decisions it made that affected both the domestic and international financial systems. What emerges is how difficult decision making was after the 1970s, following the breakdown of the postwar certainties of the 1950s and 1960s. Though the title suggests that the coverage of the book extends to 2003, it largely ends in 1997. The years that followed are treated with much less depth. That is understandable, as the elephant in the room for any recent history of the Bank of England is the banking crisis of 2007–2008. As it is, the dates chosen are those between which Eddie George, governor of the Bank of England between 1993 and 2003, exerted his greatest influence, having joined in 1962. Increasingly after 1997 Mervyn King took a leading role, becoming deputy governor in 1998 and then governor in 2003. We will have to wait for another commissioned history to discover what part the Bank of England played in the first major banking crisis to hit Britain since that of Overend and Gurney in 1866. Judging from a comment made in this book (p. 432) it is possible that a full understanding of those years will never emerge. When the Monetary Policy Committee, located in the Bank of England, was set up in 1997 it was agreed that the meetings would be recorded and a full transcript of the discussion made. Subsequently, it was decided to delete the recording and destroy the transcript, leaving only the published official record of what took place. This mirrors the Bank of England's destruction of the papers relating to its role in the secondary banking crisis of 1974.