The Bank of England’s Governor Mervyn King announced in a speech on Sunday that the image of Adam Smith will appear on new £20 BOE banknotes to be introduced into circulation next Spring. (Hat tip: Felix Salmon of RGE Monitor, who provides a picture of the new design. ADDENDUM: More on King's speech here from Gavin Kennedy, who was in the audience.) Without apparent awareness of the irony that Smith was a critic of monopoly privileges like those of the Bank of England, King said:

As the central bank for the United Kingdom, the Bank of England is in a privileged position to acknowledge the enduring contribution of its most talented citizens over their lifetime to the advancement of society. Our choice of Adam Smith reflects the keen importance we attach to that position and the place of the notes themselves as a record of Britain’s heritage.

On the Bank of England’s website, a “brief background” on Adam Smith says nothing about Smith’s views on banking, which included the view that competition is better than monopoly in the issue of banknotes. Let me fill the gap by extracting the concluding paragraph of Smith’s discussion of banking in The Wealth of Nations [Book II, chapter ii, para. 106]:

If bankers are restrained from issuing any circulating bank notes, or notes payable to the bearer, for less than a certain sum, and if they are subjected to the obligation of an immediate and unconditional payment of such bank notes as soon as presented, their trade may, with safety to the public, be rendered in all other respects perfectly free. The late multiplication of banking companies in both parts of the United Kingdom, an event by which many people have been much alarmed, instead of diminishing, increases the security of the public. It obliges all of them to be more circumspect in their conduct, and, by not extending their currency beyond its due proportion to their cash, to guard themselves against those malicious runs which the rivalship of so many competitors is always ready to bring upon them. It restrains the circulation of each particular company within a narrower circle, and reduces their circulating notes to a smaller number. By dividing the whole circulation into a greater number of parts, the failure of any one company, an accident which, in the course of things, must sometimes happen, becomes of less consequence to the public. This free competition, too, obliges all bankers to be more liberal in their dealings with their customers, lest their rivals should carry them away. In general, if any branch of trade, or any division of labour, be advantageous to the public, the freer and more general the competition, it will always be the more so.