Edinburgh's Economy

Edinburgh's Economy - 1Will Roper HIST 210 Ed Mathieu...

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Unformatted text preview: 1Will Roper HIST 210 Ed Mathieu Edinburgh Making Bank Today, Edinburgh has the second strongest economy of any city in the United Kingdom aside from London (Hamilton). London's development was always ahead of Edinburgh and the development of industry was no different. With so much industry taking off in London, Edinburgh looked to different forms of economic possibilities to get a foothold in, and it was found in the world of banking. The Bank of Scotland was established in 1695. The bank was established by the Parliament of Scotland and opened for business in February 1696 (Hamilton). This advancement and entry into the world of finances might seem like Edinburgh was jumping on the bandwagon as the Bank of England had just been established a year earlier, but the Bank of Scotland was a very different institution. The Bank of England had been established specifically for the purpose of financing defenses for the government whereas the Bank of Scotland was set up by the Scottish government in order to be used for Scottish businesses. In fact, the government cannot receive any funds from the bank without parliamentary approval (Daiches). For 21 years, the Bank of Scotland had a monopoly on the banking industry until the entry of their largest competitor, The Royal Bank of Scotland, into the market in 1716 (Daiches). This lead to the inevitable "Bank Wars" where each bank tried to drive the other out of business. The battle ended around 1740, but only because of new competitors opening up shop all across the United Kingdom. The Bank of Scotland was instrumental in establishing the security and the stability of the British banking system during several collapses by other banks including the disastrous collapse of the Ayr Bank in 1772 where the Bank of Scotland stepped in to clean up the mess. The Bank of Scotland also stepped into assure stability when the Western Bank failed in 1857 and ensured that all Western Bank's notes were paid (Hamilton). Scotland's largest city, Glasgow, became Scotland's leading industrial city, and this made banking in Edinburgh all the more central and important to maintaining Edinburgh's high economic status. For over 300 years now, banking has been the heart and soul of Edinburgh's economy and today Edinburgh enjoys a high standard of living and low unemployment rates. In fact, Edinburgh has become Europe's sixth largest financial center. I find this form of specialization in the city to be a sign of great stability, and I'm sure that Edinburgh's financial and economic might will only grow over time. Bibliography Daiches, David. Edinburgh. London: Hamish Hamilton, 1978. "History of Bank of Scotland." HBOS. 10 Sept. 2007 <http://www.hbosplc.com/about/history/bos_history.asp>. Hamilton, Henry. "The Failure of the Ayr Bank." JSTOR. ...
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