The theory of regulation: A review article

Journal of Financial Regulation and Compliance

Volumn 9, Issue 1, 2001, Pages 67-80

  Uche, Chibuike Ugochukwu ^a  

^a UNIVERSITY OF NIGERIA   (Nigeria)

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EID: 53749092770     PISSN: 13581988     EISSN: 17400279     Source Type: Journal    
DOI: 10.1108/eb025063     Document Type: Article

References (89)

1. Ogus, A. (1994) ‘Regulation: Legal Form and Economic Theory’, Clarendon Press, Oxford, p. 1.
2. See Bromwich, M. (1985) ‘The economics of accounting standard setting’, Prentice Hall, London
3. Bromwich, M. (1992) ‘Financial reporting, information and capital markets’, Pitman Publishing, London for an extensive discussion of market failure.
4. Dworkin defined paternalism as ‘the interference with a person’s liberty of action justified by reasons referring exclusively to welfare, good, happiness, needs, interests or values of the person being coerced’. Quoted in Ogus (1994) ‘Financial reporting, information and capital markets’, Pitman Publishing, London for an extensive discussion of market failure, p. 51.
5. Lasswell, H. D. (1950) ‘Politics: who gets what, when, how’, Peter Smith, New York. Lasswell defined politics as who gets what, when and how. For the purposes of this study, the Chambers English Dictionary definition of politics as the ‘maneuvering and intriguing’ involved in the formulation and implementation of regulation, will be used.
6. Peltzman, S. (1989) ‘The economic theory of regulation after a decade of deregulation’, in Bailey, M. N. and Winston, C. (eds) ‘The Brookins Papers of Economic Activity’, Brookins Institution, Washington, p. 4; and Ogus (1994) The Brookins Papers of Economic Activity’, Brookins Institution, Washington, p. 15.
7. See, for instance, Huntington, S. (1952) ‘The marasmus of the ICC, Yale Law Journal, Vol. 61, pp. 467-509.
8. Investigations subsequent to the great crash of 1929 revealed that the speculative fever of the 1920s had been worsened for thousands of small investors and speculators by fraud in the touting of equity securities. For instance, stocks were issued for worthless corporations without true information being made available to purchasers. Investment companies affiliated with commercial banks also manipulated market prices to the advantage of insiders and the distress of outsiders. The consequence was legislation in 1933 (information disclosure regarding new securities) and 1934 (regulation of securities market) culminating in the establishment of the SEC (Reagan, M. D. 1987 ‘Regulation:The politics of policy’, Little Brown and Company, Boston.)
9. The drug involved was elixir sulphanilamide which contained a poison that killed more than 100 people in September 1937. (Temin, P. (1979) ‘The origin of compulsory drug prescriptions’ The Journal of Law and Economics and Management Sciences, Vol. 2, pp. 94-95).
10. The bill gave the Food and Drug Administration (FDA) authority to require that new prescription drugs be proven effective for the announced purposes. This followed the public disclosure, in the Washington Post, that there was a widespread birth defect problem of truncated or missing limbs in babies born to European women who had used the sedative, thalidomide, while pregnant (Reagan (1987) ‘The origin of compulsory drug prescriptions’ The Journal of Law and Economics and Management Sciences, ref. 7, p. 20).
11. Edwards, J. R. (1980) ‘British company legislation and company accounts, 1844-1976', Arno Press, New York, p. vi. This Act was repealed in 1825.
12. The incident, which caused the death of 4,000 people in Greater London, led to the government appointment of the Beaver Committee and the consequent legislation (Gunningham, N. (1974) ‘Pollution, social interest and the law’, Martin Robertson and Company, London, p. 59.)
13. Posner, R. A. (1974) ‘Theories of economic regulation’, The Bell Journal of Economics and Management Science, Vol. 5, p. 336.
14. An implicit assumption of the public interest theory of regulation is that public interest and the interest of regulatees are dissimilar.
15. Posner (1974) An implicit assumption of the public interest theory of regulation is that public interest and the interest of regulatees are dissimilar, p. 337.
16. Posner (1974) An implicit assumption of the public interest theory of regulation is that public interest and the interest of regulatees are dissimilar, p. 337.
17. See, for instance, Posner, R. A. (1970) ‘A statistical study of antitrust enforcement’, Journal of Law and Economics, Vol. 13, pp. 365-419
18. Gerwig, R. W. (1962) ‘Natural gas production: A study of costs of regulation’, The Journal of Law and Economics, Vol. 5, pp. 69-92
19. Stigler, G. (1971) ‘The theory of economic regulation’, Bell Journal of Economics and Management Sciences, Vol. 2, pp. 3-21.
20. Regulated companies are sometimes required to seek approval before adopting new technologies or venturing into new areas.
21. Gardener, P. M. (1986) ‘Supervision in the United Kingdom’ in Gardener, P. M. (ed.) ‘U.K. banking supervision: Evolution, practice and issues’, Allen and Unwin, London, p. 29.
22. Stigler, G. (1964) ‘Public regulation of the securities markets’, The Journal of Business, Vol. 37, pp. 117-142. Stigler, for instance, compared the performance of a typical portfolio of new issues before and after the setting up of the Securities and Exchange Commission which attempted to impose regulations to ensure the accuracy of the information accompanying the floatation of new shares. Stigler similarly concluded that ‘grave doubts exist whether, if account is taken of the cost of regulation, the SEC has saved the purchasers of new issues one dollar’.
23. See also Gerwig (1962) ‘Public regulation of the securities markets’, The Journal of Business, ref. 16
24. Stigler, G. and Friedland, C. (1962) ‘What can regulators regulate? The case of electricity’, The Journal of Law and Economics, Vol. 5, pp. 1-16.
25. The title of Stigler’s 1971 paper (The theory of economic regulation) is somewhat misleading. As Becker, G. S. (1976) ‘Comment’, Journal of Law and Economics, Vol. 19, pp. 245-248, emphasised, it is best to think of an economic theory of regulation rather than a theory of economic regulation.
26. Stigler (1971) ‘Comment’, Journal of Law and Economics, p. 3.
27. The capture theory was not new in 1971. Well-known versions had appeared earlier (see for instance, Bernstein, M. H. (1955) ‘Regulating business by independent commission’, Princeton University Press, Princeton). What was new was its broad appeal to economists based on the accumulating evidence of empirical research (Peltzman (1989) Journal of Law and Economics, p. 5).
28. Some scholars have since attempted a modification of the basic capture model. For instance, Peltzman (in Peltzman, S. (1976) ‘Toward a more general theory of regulation’, The Journal of Law and Economics, Vol. 19, pp. 211-248, argues that the complete capture of any agency by any group would imply that the activities of the agency were run exclusively in the interest of that group. Such a policy must inevitably arouse opposition from other groups who are adversely affected, and a more likely outcome of the regulatory process would be a balancing of opposing interests. The point of political equilibrium in the Peltzman model will depend upon the organisational costs faced by the two opposing groups.
29. For instance, it is a well-known fact that the allocation of television channels among communities does not maximise industry revenue but reflects pressures to serve many smaller communities (Stigler (1971) ‘Toward a more general theory of regulation’, The Journal of Law and Economics, ref. 16, p. 7).
30. This is perhaps because such governments are usually less accountable. The absence of checks and balances discourages reason and dialogue in decision making. Any attempt, therefore to understand the mechanisms of decision making under such systems becomes onerous.
31. Ricketts, M. and Shaw, K. (1984) ‘The theory of regulation’, in Peacock, A., Ricketts, M. and Robinson, J. (eds) ‘The regulation game: How British and West German companies bargain with govern- merit’, Basil Blackwell Publishers, Oxford, p. 14.
32. Society’s perception of ‘public good’ changes over time. This is because such perceptions are determined by a shifting interplay of a variety of forces: bureaucrats, careerists, professionals, political appointees, legislators, courts, interest groups, the media etc, with differing objectives, views and stakes that are subject to change depending on the issues and the circumstances (Katzmann, R. A. (1990) ‘Comments on Levine and Forrence, “Regulatory capture, public interest and the public agenda: Towards a synthesis”', Journal of Law, Economics & Organisation, Vol. 6, p. 200.
33. Before the industry was mandated to stop advertising in the broadcasting media, it was low in the ranking of profitable American industries. In the 1970s, subsequent to the ban, they catapulted to the top (Doron, G. (1979) ‘The smoking paradox: Public regulation in the cigarette industry’, Abt Books, Cambridge, Massachusetts, p. 86). By 1972, the failure of the prohibition of cigarette commercials had been realised in some quarters. For instance, Bruce W. Wilson, then the Deputy Assistant Attorney General told the Senate Consumer Subcommittee hearing that ‘the public interest might be better served through the assumption of both cigarette commercials and the antismoking messages that were so prevalent before the broadcasting ban’ (Doron, 1979, p. 89).
34. According to the American Cancer Society, ‘While this law[The Prohibition of Advertising Act] was hailed as a victory for the anti-smoking forces, it could not be foreseen that it would also produce a serious drawback. Since the broadcasters could no longer advertise cigarettes, they no longer were required to carry anticigarette messages. How powerful these messages had really been was demonstrated by what happened when they were no longer there. By the end of 1971, the per capita consumption curve for cigarettes had begun to point upward again; then it continued to move up gradually through 1972, 1973 and 1974' (Doron (1979) ‘The smoking paradox: Public regulation in the cigarette industry’, Abt Books, Cambridge, Massachusetts, p. 86). By 1972, the failure of the prohibition of cigarette commercials had been realised in some quarters. For instance, Bruce W. Wilson, then the Deputy Assistant Attorney General told the Senate Consumer Subcommittee hearing that ‘the public interest might be better served through the assumption of both cigarette commercials and the antismoking messages that were so prevalent before the broadcasting ban’, ref. 28, p. 91).
35. th April, 1996.
36. According to Adam Smith ‘As every individual … endeavours as much as he can both to employ his capital in the support of domestic[k] industry, and so to direct that industry that its produce may be of the greatest value; every individual necessarily labours to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public[k] interest, nor knows how much he is promoting it … he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention’ (quoted in Raphael, D. D. (1985) ‘Adam Smith’, Oxford, University Press, Oxford, p. 70. The invisible hand theory is not without its critics.
37. See for instance Hahn, F. (1982) ‘Reflections on the invisible hand’, Lloyds Bank Review, Vol. 144, pp. 1-21.
38. For instance, the 1905 Companies Act in the Gold Coast (Ghana) prevented Gold Coast registered companies from engaging in banking activities. This legislation effectively eliminated Africans from engaging in such practices. At the time, the Africans, though an interest group in the Gold Coast economic arena, were not a political force to be reckoned with. The political equation was altered in the 1940s. With the imminence of independence, the retention of the native exempt clause became politically inexpedient for the colonial government. Thus a shift from direct discrimination regulation to those that appealed to economic reasoning and the protection of the ‘public interest’. See Trevor, Sir Cecil (1951) ‘Report on bank- ing in the Gold Coast and on the question of setting up a national bank’, Government Printers
39. Accra and Uchc, C. U (1995) ‘From currency board to central banking: The Gold Coast experience’, South African Journal of Economic History, Vol. 10, pp. 80-94 for a general discussion of the pre-indcpendence regulatory changes in the Gold Coast banking industry.
40. There is little doubt that the national policy objective of any nation is nonstatic. For a society in transit from colonisation to independence, the change in its perception of public good may be drastic. The rejection of the colonial system presupposes that the system acted more against the interest of the Africans. Implicit in the rejection of the colonial system, therefore, is a call for a change of status quo. All components of the old system, including its banking structures, must therefore come under scrutiny with a view to restructuring them to satisfy the new national interest.
41. There have been calls for a synthesis of the two regulatory theories. See for instance, Reagan (1987) Ch. 2, There is little doubt that the national policy objective of any nation is nonstatic. For a society in transit from colonisation to independence, the change in its perception of public good may be drastic. The rejection of the colonial system presupposes that the system acted more against the interest of the Africans. Implicit in the rejection of the colonial system, therefore, is a call for a change of status quo. All components of the old system, including its banking structures, must therefore come under scrutiny with a view to restructuring them to satisfy the new national interest., ref. 7
42. Levine, M. E. and Forrence, J. L. (1990) ‘Regulatory capture, public interest, and the public agenda: Towards a synthesis’, Journal of Law, Economics, & Organisation, Vol. 6, pp. 167-198.
43. Bank of England (1978b) ‘Regulation in the City and the Bank of England’s Role’, Bank of England Quarterly Bulletin, Vol. 18, p. 380.
44. This is the term generally used to refer to regulation which typically affects a number of industries and is intended to promote a general societal good such as clean air or water (Wilson, G. K. (1984) ‘Social regulations and explanations for regulatory failure’, Political Studies, Vol. 32, pp. 203.
45. Ogus, A. (1995) ‘Rethinking self regulation’, Oxford Journal of Legal Studies, Vol. 15, pp. 107-108.
46. This may not hold when the regulatory authority is ‘captured’ by the industry as it then becomes a front for the industry.
47. Ogus (1995) This may not hold when the regulatory authority is ‘captured’ by the industry as it then becomes a front for the industry., p. 99.
48. Bank of England (BOE) (1978b) This may not hold when the regulatory authority is ‘captured’ by the industry as it then becomes a front for the industry., p. 379. This is perhaps because laws and rules often reflect compromise rather than the interests of any one group
49. Gunningham, N. (1974) ‘Pollution, social interest and the law’, Martin Robertson and Company, London, p. 61).
50. BOE (1978b) ‘Pollution, social interest and the law’, Martin Robertson and Company, London, p. 380.
51. National Consumer Council (NCC) (1986) ‘Self-regulation’, National Consumer Council, London, p. 1.
52. National Consumer Council (NCC) (1986) ‘Self-regulation’, National Consumer Council, London, p. 1.
53. Graham, C. (1994) ‘Self regulation’ in Richardson, D. and Genn, H. (eds) ‘Administrative law and government action’, Oxford University Press, Oxford, p. 195.
54. This extensively explains the advent of codes of practice for the banking, press, advertising and building society industries in Britain (Graham (1994) ‘Self regulation’ in Richardson, D. and Genn, H. (eds) ‘Administrative law and government action’, Oxford University Press, Oxford).
55. An example of this is the British Board of Film Classification. Its origins could, to some extent, be traced to the uneasiness of the early cinema industry about the loss of reputation due to the activities of fringe operators.
56. An example of this is the British Board of Film Classification. Its origins could, to some extent, be traced to the uneasiness of the early cinema industry about the loss of reputation due to the activities of fringe operators., p. 194.
57. An example of this is the British Board of Film Classification. Its origins could, to some extent, be traced to the uneasiness of the early cinema industry about the loss of reputation due to the activities of fringe operators., p. 194.
58. In the case of independent public agencies, such costs are usually borne by taxpayers (Ogus (1995) An example of this is the British Board of Film Classification. Its origins could, to some extent, be traced to the uneasiness of the early cinema industry about the loss of reputation due to the activities of fringe operators., p. 98).
59. The NCC, for instance, recommended that self-regulatory schemes should adhere to the following guidelines: (1) the scheme must be able to command public confidence; (2) there must be a strong external involvement in the design and operation of the scheme; (3) as far as practicable, the control and operation of the scheme should be separate from the institutions of the industry; (4) consumers and other outsiders should be fully represented on the governing bodies of such schemes; (5) the scheme must be based on clear statements of principles and standards; (6) there must be a clear, accessible and wellpublicised complaints procedure where breach of the code is alleged; (7) there must be adequate and meaningful sanc- dons for non observance; (8) the scheme must be monitored and updated in the light of changing circumstances and expectations; and (9) there must be a degree of public accountability such as an annual report (NCC (1986) An example of this is the British Board of Film Classification. Its origins could, to some extent, be traced to the uneasiness of the early cinema industry about the loss of reputation due to the activities of fringe operators., p. 15).
60. Those who have not agreed to follow self-regulatory schemes are usually the source of consumer problems (NCC (1986) An example of this is the British Board of Film Classification. Its origins could, to some extent, be traced to the uneasiness of the early cinema industry about the loss of reputation due to the activities of fringe operators., p. 6). Reynolds (1981) also asserted that as ‘a social group grows and becomes more complex, the efficiency of non-market implicit controls declines. The group becomes more heterogeneous, and general agreements on ethical values and other institutional arrangements decreases’ (quoted in Reagan (1987) An example of this is the British Board of Film Classification. Its origins could, to some extent, be traced to the uneasiness of the early cinema industry about the loss of reputation due to the activities of fringe operators., ref. 7, p. 34).
61. Ramsay, I. (1987) ‘The Office of Fair Trading: Policing the consumer marketplace’, in Baldwin, R. and McMrudden, C. (eds) ‘Regulation and public law’, Weidenfeld and Nicolson, London, p. 191
62. Breyer, S. (1982) ‘Regulation and its reform’, Harvard University Press, Cambridge, p. 179.
63. Graham (1994) ‘The Office of Fair Trading: Policing the consumer marketplace’, in Baldwin, R. and McMrudden, C. (eds) ‘Regulation and public law’, Weidenfeld and Nicolson, London, p. 195.
64. Graham (1994) ‘The Office of Fair Trading: Policing the consumer marketplace’, in Baldwin, R. and McMrudden, C. (eds) ‘Regulation and public law’, Weidenfeld and Nicolson, London, pp. 195-196.
65. The supervision of banks, unlike the other non-financial industries arises from the unique fiduciary responsibility which bankers assume when they accept other people’s money for safekeeping. It is therefore not surprising that the defining activity for statutory control is usually the act of deposit. Cooke, P. W. (1982) ‘The role of the banking supervisor’, Bank of England Quarterly Bulletin, Vol. 22, p. 547.
66. In an attempt to safeguard such depositary firms, it is usual for regulating bodies to set up entry barriers into such activities. For instance, a licence is widely required before any company can engage in banking functions. Licensing conditions usually include: a minimum paid up capital, security clearance of the directors, availability of competent manpower among others. Licensing is also sometimes influenced by the overall macroeconomic goal of the territory. Established financial institutions also come under regulatory scrutiny. They are usually subjected to various capital adequacy, liquidity, reserve, risk management and lending regulations.
67. The losses of depositary failure are, however, not constrained to the depositors and deposits. The external effects are usually large. For instance, the cumulative failure of the depositary industry has been identified by some scholars as the reason behind the great depression of the 1930s (Spellman, L. J. (1982) ‘The depository firm and industry: Theory, history and regulation’, Academic Press, New York, p. 9.
68. Justifying its support operations during the fringe-banking crisis of 1973, the Bank of England argued that it found itself ‘confronted with the imminent collapse of several deposit-taking institutions, and with the clear danger of a rapidly escalating crisis of confidence. This threatened other deposit-taking institutions and, if left unchecked, would have quickly passed into parts of the banking system proper. While the UK clearing banks still appeared secure from the domestic effects of any run-indeed the money-market deposits withdrawn from the fringe were largely redeposited with them-their international exposure was such that the risk to external confidence was a matter of concern for themselves as well as for the Bank. The problem was to avoid a widening circle of collapse through the contagion of fear’. (Bank of England (1978a) ‘The secondary banking crisis and the Bank of England’s support operations’, Bank of England Quarterly Bulletin, Vol. 18, p. 233.)
69. In line with this, the 1985 Annual Report of the Federal Reserve Bank of New York, commented as follows ‘The interconnections among institutions and markets in the new environment get more and more complex. A shock that starts in one market may spread quickly along this network until it finds a weakness in some seemingly unrelated place. In fact there is a growing tendency to build financial links along regulatory fault lines where the responsibility for supervisory oversight is weak, divided or clouded’ (p. 26).
70. Bank of England (1984) ‘The business of financial supervision’, Bank of England Quarterly Bulletin, Vol. 24, p. 49.
71. Reid, M. (1986), ‘Lessons for bank supervision from the secondary banking crises’, in Gardener, E. (ed.) ‘UK banking supervision:Evolution, practice and issues’, Allen and Unwin, London, p. 100.
72. Bank of England (1984) ‘Lessons for bank supervision from the secondary banking crises’, in Gardener, E. (ed.) ‘UK banking supervision:Evolution, practice and issues’, Allen and Unwin, London, p. 50.
73. There is, however, a case for protecting the unsophisticated depositor from the unreliable operators. This will be discussed later.
74. Dale, R. (1992) ‘International banking deregulation: The great banking experiment’, Blackwell Publishers, Oxford, p. 8.
75. For instance, the bailing out, in 1984, of Continental Illinois, was justified by the then FDIC Chairman, Mr William Isaac on the grounds that ‘closing the bank and paying off insured depositors could have had catastrophic consequences for other banks and the entire economy. Insured accounts totalled only slightly more than S3bn. This meant that depositors and other private creditors with over S30bn in claims would have had their funds tied up for years in a bankruptcy proceeding awaiting the liquidation of assets and the settlement of litigation. Hundreds of small banks would have been particularly hard hit. Almost 2,300 small banks had nearly S6bn at risk in Continental; 66 of them had more than their capital on the line and another 113 had between 50 and 100 per cent. More generally, closure of a bank whose solvency was apparently not impaired, in response to its liquidity and confidence problems would have raised concerns about other soundly managed banks’. Quoted in Dale (1992) ‘International banking deregulation: The great banking experiment’, Blackwell Publishers, Oxford, pp. 9-10).
76. This will be discussed later on in this section.
77. In the 1973 banking crisis, the ‘lifeboat’ committee, required the following conditions to be satisfied before support was provided: (1) that the company seeking support was currently trading solvently and was likely to remain solvent provided it received liquidity support by way of recycled deposits; (2) that the company exhibited sufficient banking characteristics to justify inclusion in the scheme (the possession of a s.123 certificate, for instance) and had attracted a significant level of deposits from the public; and (3) that the company did not possess any institutional shareholders whose interest in the company was such that they might properly be expected to provide the necessary support (Bank of England (1978a) ‘International banking deregulation: The great banking experiment’, Blackwell Publishers, Oxford, ref. 58, p. 233).
78. Reserve Bank of Australia (1979) ‘Submission to the Committee of Inquiry into the Australian Financial System’, Reserve Bank of Australia, Sydney, Ch. 12.
79. It is usually argued that it is necessary to offer some form of protection to indigenous companies. Such protection is required in order to protect them from the usually better-equipped foreign companies. This is necessary for the survival and constrained development of indigenous companies (United Nations Centre for Trans National Corporations (UNCTC, 1981) ‘Transnational banks:Operations, strategies and their effects on developing countries’, United Nations, New York.
80. Reserve Bank of Australia (1979) ‘Submission to the Committee of Inquiry into the Australian Financial System’, Reserve Bank of Australia, Sydney, Ch. 12.6.
81. Blunden, G. (1977) ‘International cooperation in banking supervision’, Bank of England Quarterly Bulletin, Vol. 17, p. 325.
82. Bank of England (1984) ‘International cooperation in banking supervision’, Bank of England Quarterly Bulletin, p. 49.
83. Bank of England (1984) ‘International cooperation in banking supervision’, Bank of England Quarterly Bulletin, p. 49.
84. A possible solution to the problem is to allow privately run insurance schemes to cater for the protection of the depositors. But this has its own problems: the possibility of a claim does not only depend on systematic risks but also on unsystematic risks. The incentive, on the part of management* to behave with due care may be reduced if deposit insurance can be purchased. Private insurers may tackle this problem by varying the premium rates depending on the riskiness of the deposit taker ‘International cooperation in banking supervision’, Bank of England Quarterly Bulletin.
85. Fund management and bond issuing, for instance, involve potential conflicts of interest, yet UK banks perform both activities and are able to maintain the confidence of their clients by ensuring that a Chinese wall of silence exists between the different activities. An alternative way of maintaining market integrity is to ensure full disclosure of the activities of the market. This will enable customers to check that they are getting the going prices. The best approach to adopt is open to argument. For instance, it could be argued that the abolition of a single capacity could lead, through agglomeration, to substantial economies of scale. On the other hand, the information required to make the disclosure system work could be very expensive both to produce and consume ‘International cooperation in banking supervision’, Bank of England Quarterly Bulletin, p.47).
86. As a result of the Big Bang, jobbers were replaced by market makers.
87. The above regulations changed in 1986. Both stockbrokers and market makers are now able to act in dual capacity. They can, for instance, deal directly with investors (buying and selling securities from their own books), or act as agents, putting deals together for clients on commission basis. There are however rules in place to ensure that investors are not disadvantaged under this dual capacity system. See Bank of England (1985). ‘Developments in UK banking and monetary statistics since the Radcliffe Report’, Bank of England Quarterly Bulletin, Vol. 25, pp. 392-396.
88. See Dale (1992) ‘Developments in UK banking and monetary statistics since the Radcliffe Report’, Bank of England Quarterly Bulletin, Ch. 2, for an analysis of events leading to this abandonment.
89. See also Dale (1992) ‘Developments in UK banking and monetary statistics since the Radcliffe Report’, Bank of England Quarterly Bulletin, Ch. 2, for a review of the debate.