Edited by Kleio Akrivou and Alejo José G Sison
Chapter 5: Disposed towards self-restraint: the London clearing banks, 1946–71
In the period from the end of the Second World War until the implementation of the Banking Act 1979, a hallmark of the regulatory framework within which banking in the UK operated was its ‘self-regulatory’ character. To a certain degree, banks regulated themselves. More precisely, regulation operated on two levels. First, it was codified, explicit and formal, and included regulation arising from legal requirements, accounting requirements and membership of international bodies. Second, banks were regulated according to requirements that were tacit, implicit and informal, and it was on this level that self-regulation played its role. A notable feature of banking at this time was that, scattered across its firmament, there were constellations of ‘like’ institutions. These constellations – such as The Committee of London Clearing Bankers, The British Overseas Banks Association, and the Foreign Banks and Affiliates Association – were pillars of the self-regulatory system. Focusing on The Committee of London Clearing Bankers, this chapter evaluates how effective or otherwise these associations were as informal regulatory mechanisms. To what extent were they able to regulate the behaviours of their members within an acceptable range? Then, using Lloyds Bank Limited as an exemplar, the chapter explores how banks perceived their role in society. How did that perception change in the decades after the Second World War? The research methodology is based on the collection and analysis of primary source materials held in professional archives. These materials include both published and unpublished records: official records (held, for example, in The National Archive and at the Bank of England’s archive) and non-official records (for example, those within the Lloyds Banking Group Archive and the records of the Committee of London Clearing Bankers).
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