The history of banking system of England the Bank of England is the oldest Central Bank in the world. This institution emerged in the late seventeenth century in England, in the so-called transaction between the almost bankrupt government and a group of financiers. The banking system of England 1690-ies consisted of the creditors of the bankers who gave loans of borrowed money, and goldsmiths, who took gold in the deposits and then provide loans. In 1688 costly civil war finally ended, and the throne of England ascended William and Mary. Came to power the political party that pursued a policy of mercantilism and the predatory seizure of colonies. The most serious enemy of England was the French Empire, and soon Britain unleashed a half-century of war. The policy of militarism was very expensive, and in the 1690s the British government found that the Treasury is depleted and no money. It was impossible for the government to encourage people to buy its bonds after so many years of war. To collect taxes at a higher rate is also not possible. Then in 1693 was founded the Committee of the house of Commons, with the aim of finding ways to get money for the government. Then there was the Scottish financier William Patterson offered on behalf of his financial group, a completely new plan of government. In exchange for certain privileges from the state, Peterson suggested to create the Bank of England, which would have issued new banknotes and covered the deficit. Thus, a deal was struck. Immediately after the Bank's approval by Parliament in 1694 the king William and some members of Parliament rushed to become shareholders of the new "cash factory". William Peterson demanded from the British government to assign new banknotes the status of legal tender. The British government refused, stating that it "went too far", but the new Parliament gave the Bank the privilege of holding government deposits and to issue new securities to pay for government debt. The Bank of England immediately issued new money in the amount of 760 000 pounds, which went to pay the debt. This caused a jump in inflation, and for two years the Bank was absolutely insolvent, gave certain benefits to private jewellers. Banknotes of the Bank of England could be freely exchanged for circulating metal coins. In 1696 the Bank of England, controlled by the magnates of the ruling political party Whig, faced with the threat of competition. The Tory party tried to establish a new National Land Bank and although this venture failed, the Bank of England immediately took action. The following year, the Parliament passed a law prohibiting the establishment in England of large banks. According to the same law, fake of banknotes of the Bank of England was punishable by death.