The Bank of England had tried something similar in 1697, offering its own shares to holders of certain loans on which it appeared the government might stop paying the interest due. For those who owned the suspect paper, the bet was that the Bank would be much better placed than any individual to force the crown’s officials to pay up, if not on time, then eventually. This was a popular view—investors swapped about £800,000 in obligations for the Bank’s stock—and it turned out to be correct.
