Financial Crises and Structural Change in English Commercial Bank Assets, 1860–1913

The focus of analysis is the relationship between short-term financial shocks and long-term changes in the asset structure of the commercial banks of England and Wales in the decades before World War I. New annual series are presented for the main categories of bank asset ratios and these are tested for structural change. The results emphasize the importance of the financial crises of 1878 and 1890 in the long-term increase in the liquidity of commercial bank assets as the banks shifted their holdings from private sector credits to public sector assets.