Tracing the Banks of Ireland, Part 1

Posted on 12/18/2018

Faced with England's wars and a currency shortage, the Bank of Ireland was formed to address the country's declining economy.

The Ireland we know today began to take form after being conquered by King Henry VIII in the 1500s. Ireland officially became a kingdom under the rule of England in 1541, but there were still conflicts to come.

England had a difficult time enforcing its rule in Ireland, as it was made up of many lords who claimed dominion. King Henry was unable to quell the rebellions against England in his lifetime. It wasn't until 1603 before all of Ireland was under the control of England.

Trade in Ireland was much like the rest of the world prior to government banks, relying heavily on bartering and coins. Coins were increasingly hard to come by in Ireland, and England’s wars affected Ireland’s supply of money. Constant wars caused the government to spend gold and silver, drying up the local coffers in Ireland. This pushed people to hoard what precious metals they had.

Ireland began using paper out of necessity when gold and silver became harder to find. Merchants and smiths needed an easier avenue than struggling to find precious metals for business, forcing many to use receipts, create a log book of sorts, or open a private bank.

These private banks were subject to heavy restrictions such as a stamp duty, or additional fee, on issued banknotes. The banks were also faced with a restriction that limited the number of partners to six per bank—hindering their overall growth and drive to fulfill the needs of the country.

Ireland soon faced a shrinking economy, due to the constant outflow of money to pay for England’s continuous wars. At the same time, small banks were unable to keep up with demand.

In 1783, the Bank of Ireland was founded in Dublin to help address the dwindling economy. The bank was an official government entity, and with government backing, people believed it provided more security than the small private banks. When the bank was founded, it issued currency in a limited supply that was only redeemable in Dublin.

The bank did not issue notes smaller than £5 until 1797, when the Bank of England and its counterparts made a “temporary” suspension of cash for gold or silver. The temporary ban was not lifted until the 1820s, making the people of Ireland weary of banking.

Moreover, the Bank of Ireland only issued notes in the area directly surrounding Dublin, leaving the outlying cities to continue to deal with small private banks for their currency needs. These areas faced greater economic struggles in the early 1800s, contributing to a rise in calls for a new kind of system. Resulting acts passed in the 1820s brought Joint Stock banking to the cities far from Dublin after longstanding success in Scotland. Unlike Ireland, Scotland did not feel the effects from a lack of currency due to its unique system of Joint Stock banks.

The Bank Acts of the 1820s lifted some of the tight regulations that banks had previously encountered in Ireland. One big change was allowing banks to register, once a year, the list of partners for the bank, enabling Joint Stock banks a chance to open in Ireland. These banks were made up of shareholders and had stocks that people could buy and sell. This type of banking allowed for large amounts of capital to be generated from selling shares, and it diffused the risk of owning a bank.

With more capital on hand, it was easier for Joint Stock banks to produce currency over the private, smaller banks. The trend in Joint Stock banking allowed Ireland to open notable banks such as Belfast Banking Company, Northern Bank, Provincial Bank, and Ulster Bank, among others.

ND (1826-37) £5 Ireland, Provincial Bank (Pick #283p) - "Proof"
PMG graded Uncirculated 62 NET
Image courtesy of Heritage Auctions.
Click image to enlarge.

Ireland’s banking system in the 1800s still had much to learn in order to endure and become the system we recognize today. Next month’s article will look at the development of these new Joint Stock banks alongside the wars and crises that Ireland’s economy had to overcome to prosper.


  • “A Dreadful Pressure for Money”: the Bank Charter Act 1844 and Bankers (Ireland) Act 1845 in the Context of the Great Irish Famine Declan Curran DCU Business School, Dublin City University.
  • Journal of the Statistical and Social Inquiry Society of Ireland. Vol. XXVI, Part I, MONEY AND BANKING IN IRELAND ORIGINS DEVELOPMENT AND FUTURE.

Stay Informed

Want news like this delivered to your inbox once a month? Subscribe to the free PMG eNewsletter today!


You've been subscribed to the PMG eNewsletter.

Unable to subscribe to our eNewsletter. Please try again later.

Articles List