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British BankingContinuity and Change from 1694 to the Present$
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Ranald C. Michie

Print publication date: 2016

Print ISBN-13: 9780198727361

Published to Oxford Scholarship Online: December 2016

DOI: 10.1093/acprof:oso/9780198727361.001.0001

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Control and Compartmentalization, 1945–1970

Control and Compartmentalization, 1945–1970

(p.162) 6 Control and Compartmentalization, 1945–1970
British Banking

Ranald C. Michie

Oxford University Press

British banking was not nationalized after the Second World War except for the Bank of England. Government intervention in the banking system exercised during the Second World War, remained long after the end of hostilities. Through the Bank of England and financial and monetary policy, the government was able to control the banking system, though only partially, applying to just the large joint-stock banks and leading merchant banks. Other types of banks were able to exploit the inability of the regulated banks to meet the needs of savers or borrowers. Over the 1950s and 1960s, new banks and new financial markets by-passed government controls. Domestic building societies were major beneficiaries as they could offer savers attractive rates of interest while lending money to those buying their own homes. The Eurodollar markets provided a means of avoiding exchange controls. This split the banking system into distinct segments and limited overall competition.

Keywords:   Bank of England, exchange controls, credit controls, clearing banks, building societies, merchant banks, Eurodollar market

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