Banking Without Border
I've now published a page on the history of Allied Irish Banks:
bankingmergers.blogspot.com/2011/01/ireland-bank-mergers-...
Despite the name of the banks, these are Northern Irish (British) Pound banknotes rather than Irish Pound (Punt) banknote.
So why some of Northern Ireland's currency is issued by Ireland's banks?
2 simple answers:
1) Ireland's banks were largely established long before the 1922 independence and split into the North and South.
2) Britain and its porvinces and colonies have a tradition of allowing commercial banks (rather than Central banks) to issue banknotes.
For a more detailed explanation, read on...
Allied Irish Banks (yes, plural) was created in 1966 when the Provincial Bank of Ireland, Royal Bank of Ireland and Munster & Leinster merged.
Look closely at the Provincial Bank of Ireland £ GBP 1 banknote and you may be surprised to see that it was established in London in 1825 and not in Dublin. Those were the days when Britain ruled Ireland and London controlled Ireland's economy and commerce. After Ireland gained independence in 1922, the three banks became Irish-based and registered eventually.
Even though Provincial Bank has been part of Allied Irish since 1966, it continued to issue Northern Irish banknotes under its own name well into the 1970s.
So why banks based in the Irish Republic still issue Northern Ireland's paper currency today? It's something to do with British banking history. When Bank of England was founded in 1694 and began issuing Britain's banknotes, there was no notion of a Central Bank or government bank, Bank of England itself was established as a commercial bank with shareholders.
In 1695, Bank of Scotland began operations under similar arrangements (commercial bank with shareholders and given the authority to issue banknotes). The same thing happened to Ireland's banks when they were founded by London's financiers from the 1780s onward.
Also, when Ireland's banks were founded, Ireland was a single province under British rule so the notion of the Irish Republic and Northern Ireland did not exist. When Ireland gained independence from Britain in 1922, which also saw the Northeastern counties choosing to stay with Britain, banks from both sides of the border simply continued to operate in each other's territory, which explained why Dublin-based banks can still issue Northern Irish Pound banknotes today.
In Ireland itself, it was the Central Bank of Ireland that issued the Irish Punt (Pound) until the Euro was adopted.
In the 1920s, when Bank of England became a government agency and was given the sole right to issue the British (English) paper currency, the Scottish and Irish banks remained private-sector banks and were not stripped of their rights to issue the Scottish Pound and Northern Irish Pound banknotes. Today, 3 Scottish banks and 4 Irish (or Northern Irish) banks are responsible for the Scottish Pound and Northern Irish Pound issue. Confusing eh?
Banking Without Border
I've now published a page on the history of Allied Irish Banks:
bankingmergers.blogspot.com/2011/01/ireland-bank-mergers-...
Despite the name of the banks, these are Northern Irish (British) Pound banknotes rather than Irish Pound (Punt) banknote.
So why some of Northern Ireland's currency is issued by Ireland's banks?
2 simple answers:
1) Ireland's banks were largely established long before the 1922 independence and split into the North and South.
2) Britain and its porvinces and colonies have a tradition of allowing commercial banks (rather than Central banks) to issue banknotes.
For a more detailed explanation, read on...
Allied Irish Banks (yes, plural) was created in 1966 when the Provincial Bank of Ireland, Royal Bank of Ireland and Munster & Leinster merged.
Look closely at the Provincial Bank of Ireland £ GBP 1 banknote and you may be surprised to see that it was established in London in 1825 and not in Dublin. Those were the days when Britain ruled Ireland and London controlled Ireland's economy and commerce. After Ireland gained independence in 1922, the three banks became Irish-based and registered eventually.
Even though Provincial Bank has been part of Allied Irish since 1966, it continued to issue Northern Irish banknotes under its own name well into the 1970s.
So why banks based in the Irish Republic still issue Northern Ireland's paper currency today? It's something to do with British banking history. When Bank of England was founded in 1694 and began issuing Britain's banknotes, there was no notion of a Central Bank or government bank, Bank of England itself was established as a commercial bank with shareholders.
In 1695, Bank of Scotland began operations under similar arrangements (commercial bank with shareholders and given the authority to issue banknotes). The same thing happened to Ireland's banks when they were founded by London's financiers from the 1780s onward.
Also, when Ireland's banks were founded, Ireland was a single province under British rule so the notion of the Irish Republic and Northern Ireland did not exist. When Ireland gained independence from Britain in 1922, which also saw the Northeastern counties choosing to stay with Britain, banks from both sides of the border simply continued to operate in each other's territory, which explained why Dublin-based banks can still issue Northern Irish Pound banknotes today.
In Ireland itself, it was the Central Bank of Ireland that issued the Irish Punt (Pound) until the Euro was adopted.
In the 1920s, when Bank of England became a government agency and was given the sole right to issue the British (English) paper currency, the Scottish and Irish banks remained private-sector banks and were not stripped of their rights to issue the Scottish Pound and Northern Irish Pound banknotes. Today, 3 Scottish banks and 4 Irish (or Northern Irish) banks are responsible for the Scottish Pound and Northern Irish Pound issue. Confusing eh?