The Corset, Funding Policy and Banking Supervision

J. C. R. Dow and I. D. Saville

in A Critique of Monetary Policy

Published in print May 1990 | ISBN: 9780198283195
Published online November 2003 | e-ISBN: 9780191596186 | DOI:

Series: Clarendon Paperbacks

 The Corset, Funding Policy and Banking Supervision

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This chapter is divided into three different sections. It analyses forms of control that are not part of the ‘classical’ tradition of the previous chapter. The first section examines the idea of the resource and lending management system known as the ‘corset’. It studies the effects of the corset and reasons why it fell into disrepute. The chapter then moves on to examine the problem of over‐funding and the role of government, banks, and the public in bringing this about. The final section is an analysis of banking supervision to prevent serious bank failures.

Keywords: bank failure; bank supervision; corset; monetary control; over‐funding; prudential supervision; public‐sector borrowing

Chapter.  7236 words.  Illustrated.

Subjects: Macroeconomics and Monetary Economics

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