The subject of an important paper issued in 1971 by the Bank of England. It outlined a number of changes affecting the banking system and the means of controlling credit. From October 1971 a new system of reserve requirements was implemented, the banks agreed to abandon collusion on setting interest rates, and the Bank of England changed its operations in the gilt-edged securities market. The main aim of these changes was to stimulate more active competition between the banks and to move towards greater reliance upon interest rates as a means of credit control. It was a prelude to the most rapid expansion in the availability of credit in the 20th century.
Subjects: Financial Institutions and Services.