The Bank of England
This is from Money, Back Credit, and Economic Cycles (Auburn, Alabama: Mises Institute, [1998] 2006), pp. 107-9. The footnotes have been removed.
The Bank of England was created in 1694 and was also patterned after the Bank of Amsterdam, due to the considerable influence Holland exerted on England following the accession of the House of Orange to the English throne. However, the bank was not constituted with the same legal guarantees of safekeeping as the Bank of Amsterdam. Instead, one of its main aims from the outset was to help finance public expenditures. For this reason, although the Bank of England was intended to stop the commonplace, systematic abuses committed by private bankers and the government, in practice this goal was never achieved. In short, the Bank of England eventually failed, despite its privileged role as the government's banker, its monopoly on limited liability in England and its exclusive authorization to issue banknotes. As a result of its systematic neglect of the safekeeping obligation and its practice of granting loans and advances to the Treasury against the bank's deposits, the Bank of England eventually suspended payments in 1797 after various colorful vicissitudes, including the South Sea Bubble. Also in 1797, the same year the Bank of England was forbidden to return deposits in cash, it was declared that taxes and debts were to be paid in bills issued by he bank, and an attempt was made to limit advances and loans to the government. This was the dawn of the modern banking system, based on a fractional-reserve ratio and a central bank as lender of last resort.