The Bank Restriction Act of 1797 was a significant piece of legislation enacted by the British Parliament during the French Revolutionary Wars. It suspended the convertibility of Bank of England notes into gold, effectively creating a fiat currency system. This measure aimed to stabilise the British economy amidst financial turmoil caused by war-related expenses and the outflow of gold reserves. The Act remained in force until 1821, contributing to economic stability but also sparking debates over monetary policy and government intervention in the banking sector.
United Kingdom legislation which restricts the Bank of England’s ability for exchanging sterling notes for gold.
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This glossary post was last updated: 29th March, 2024.
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