The_AT Structure_NN1 of_IO the_AT Banking_NN1 System_NN1 Between_II the_AT 1960s_MC2 and_CC the_AT 1980s_MC2 This_DD1 chapter_NN1 can_VM be_VBI really_RR defined_VVN as_CSA 'historic'_JJ ,_, because_II21 of_II22 the_AT great_JJ changes_NN2 that_CST have_VH0 affected_VVN the_AT British_JJ banking_NN1 system_NN1 after_II the_AT 1980s_MC2 ._. 
Even_CS21 if_CS22 no_AT gap_NN1 can_VM be_VBI found_VVN in_II the_AT evolution_NN1 --_JJ institutional_JJ ,_, structural_JJ ,_, operational_JJ --_NN1 of_IO the_AT system_NN1 (_( 'historic_JJ non_FU facitsaltus_NN1 '_GE )_) ,_, it_PPH1 's_VBZ undeniable_JJ that_CST the_AT present_JJ configuration_NN1 bears_NN2 only_RR a_AT1 thin_JJ resemblance_NN1 to_II the_AT previous_JJ morphology_NN1 ,_, legislation_NN1 ,_, functions_NN2 ._. 
At_II the_AT same_DA time_NNT1 ,_, this_DD1 retrospective_JJ view_NN1 of_IO the_AT banking_NN1 and_CC financial_JJ industry_NN1 ,_, also_RR in_II its_APPGE interactions_NN2 with_IW public_JJ policy_NN1 issues_NN2 and_CC cultural_JJ frameworks_NN2 then_RT prevailing_JJ ,_, is_VBZ useful_JJ in_BCL21 order_BCL22 to_TO put_VVI in_II focus_NN1 the_AT situation_NN1 of_IO today_RT ,_, and_CC to_TO understand_VVI better_RRR the_AT most_RGT recent_JJ turmoil_NN1 and_CC its_APPGE possible_JJ (_( not_XX necessary_JJ )_) outcomes_NN2 ._. 
To_TO be_VBI sure_JJ ,_, we_PPIS2 can_VM not_XX take_VVI the_AT whole_JJ period_NN1 from_II the_AT 1960s_MC2 through_II the_AT 1980s_MC2 as_II a_AT1 single_JJ bloc_NN1 ._. 
In_BCL21 order_BCL22 to_TO strengthen_VVI the_AT protection_NN1 of_IO competition_NN1 ,_, two_MC laws_NN2 were_VBDR passed_VVN completely_RR revising_VVG the_AT relevant_JJ legislation_NN1 :_: the_AT Competition_NN1 Act_NN1 1998_MC and_CC the_AT Enterprise_NN1 Act_NN1 2002_MC ._. 
However_RR ,_, to_TO understand_VVI the_AT various_JJ aspects_NN2 of_IO the_AT reform_NN1 and_CC grasp_VV0 its_APPGE scope_NN1 ,_, it_PPH1 is_VBZ necessary_JJ to_TO make_VVI a_AT1 brief_JJ examination_NN1 of_IO the_AT evolution_NN1 of_IO the_AT law_NN1 in_II this_DD1 field_NN1 ._. 
In_II the_AT period_NN1 from_II immediately_RR after_II the_AT Second_MD World_NN1 War_NN1 to_II today_RT ,_, competition_NN1 law_NN1 in_II the_AT UK_NP1 has_VHZ developed_VVN in_II a_AT1 haphazard_JJ way_NN1 ._. 
The_AT system_NN1 grew_VVD more_RRR and_CC more_RGR complex_JJ because_CS ,_, since_II 1948_MC ,_, there_EX have_VH0 been_VBN several_DA2 statutes_NN2 extending_VVG the_AT scope_NN1 and_CC adding_VVG new_JJ layers_NN2 of_IO legislation_NN1 ._. 
Part_NN1 of_IO the_AT law_NN1 was_VBDZ judge-made_JJ in_II the_AT form_NN1 of_IO common_JJ law_NN1 doctrine_NN1 ._. 
In_II the_AT most_RGT recent_JJ period_NN1 ,_, moreover_RR ,_, Community_NN1 law_NN1 has_VHZ exercised_VVN a_AT1 powerful_JJ influence_NN1 ,_, in_II the_AT same_DA way_NN1 as_CSA in_II the_AT banking_NN1 and_CC financial_JJ sector_NN1 ,_, both_RR through_II the_AT adoption_NN1 of_IO new_JJ legislation_NN1 and_CC through_II judgments_NN2 of_IO the_AT European_JJ Court_NN1 of_IO Justice_NN1 ._. 
The_AT most_RGT important_JJ regulatory_JJ reform_NN1 affecting_VVG banks_NN2 and_CC ,_, in_RR21 general_RR22 ,_, financial_JJ institutions_NN2 occurred_VVD only_RR during_II 1997_MC --_JJ 2000_MC ,_, after_CS few_DA2 grave_JJ ,_, but_CCB not_XX systemic_JJ ,_, banking_NN1 crises_NN2 ,_, when_CS the_AT whole_JJ structure_NN1 of_IO financial_JJ regulation_NN1 and_CC supervision_NN1 was_VBDZ changed_VVN ,_, and_CC the_AT monetary_JJ policy_NN1 decision-making_NN1 process_NN1 was_VBDZ also_RR revised_VVN ._. 
One_PN1 might_VM wonder_VVI why_RRQ this_DD1 chapter_NN1 ends_VVZ with_IW the_AT 1980s_MC2 ,_, and_CC not_XX ,_, for_REX21 example_REX22 ,_, with_IW the_AT creation_NN1 of_IO the_AT Financial_JJ Services_NN2 Authority_NN1 (_( FSA_NP1 )_) and_CC the_AT approval_NN1 of_IO the_AT Financial_JJ Services_NN2 and_CC Markets_NN2 Act_NN1 (_( FSMA_NP1 )_) of_IO 2000_MC ,_, that_DD1 will_VM be_VBI dealt_VVN with_IW in_II a_AT1 subsequent_JJ chapter_NN1 ._. 
The_AT periodization_NN1 is_VBZ always_RR a_AT1 matter_NN1 of_IO discretion_NN1 ,_, if_CS not_XX an_AT1 arbitrary_JJ choice_NN1 ;_; but_CCB fter_JJR the_AT Big_JJ Bang_NN1 and_CC during_II the_AT 1990s_MC2 a_AT1 series_NN of_IO developments_NN2 occurred_VVD that_CST shaped_VVD the_AT banking_NN1 and_CC financial_JJ system_NN1 in_II a_AT1 way_NN1 not_XX far_RR from_II today_RT 's_GE environment_NN1 ,_, for_REX21 example_REX22 in_II31 terms_II32 of_II33 internationalization_NN1 ,_, use_NN1 of_IO 'exotic'_JJ financial_JJ instruments_NN2 ,_, diversification_NN1 of_IO household_NN1 assets_NN2 in_II a_AT1 broad_JJ range_NN1 of_IO financial_JJ products_NN2 ,_, blurring_VVG of_IO distinctions_NN2 between_II different_JJ types_NN2 of_IO financial_JJ intermediaries_NN2 ._. 
The_AT legislation_NN1 of_IO 1997_MC --_JJ 2000_MC systemized_VVD this_DD1 whole_JJ matter_NN1 ,_, and_CC we_PPIS2 live_VV0 now_RT within_II that_DD1 framework_NN1 ,_, and_CC with_IW the_AT features_NN2 just_RR mentioned_VVN ._. 
In_RR21 addition_RR22 ,_, our_APPGE main_JJ database_NN1 ,_, that_DD1 covers_VVZ the_AT period_NN1 1990_MC --_JJ 2005_MC ,_, appeared_VVD the_AT best_RRT suited_VVN to_TO give_VVI a_AT1 fairly_RR comprehensive_JJ and_CC deep_JJ perspective_NN1 of_IO the_AT economic_JJ and_CC financial_JJ trends_NN2 underway_RR ._. 
Despite_II the_AT considerable_JJ differences_NN2 in_II the_AT way_NN1 they_PPHS2 operated_VVD ,_, discount_NN1 houses_NN2 are_VBR included_VVN in_II this_DD1 segment_NN1 because_CS they_PPHS2 served_VVD to_TO meet_VVI the_AT requirements_NN2 of_IO deposit_NN1 banks_NN2 ._. 
Discount_NN1 houses_NN2 were_VBDR money_NN1 market_NN1 institutions_NN2 ,_, whose_DDQGE liabilities_NN2 consisted_VVN of_IO 'sight'_JJ loans_NN2 ,_, primarily_RR obtained_VVN from_II the_AT clearing_JJ banks_NN2 as_II part_NN1 of_IO their_APPGE treasury_NN1 management_NN1 ,_, and_CC whose_DDQGE assets_NN2 consisted_VVN of_IO short_JJ to_II medium-term_JJ securities_NN2 issued_VVN by_II the_AT British_JJ government_NN1 and_CC commercial_JJ bills_NN2 ;_; securities_NN2 that_CST were_VBDR given_VVN as_CSA collateral_NN1 to_II the_AT financing_NN1 banks_NN2 ._. 
If_CS banks_NN2 were_VBDR to_TO need_VVI liquidity_NN1 and_CC withdraw_VVI their_APPGE 'sight'_JJ funds_NN2 ,_, the_AT discount_NN1 houses_NN2 could_VM turn_VVI to_II the_AT Bank_NN1 of_IO England_NP1 as_CSA lender_NN1 of_IO last_MD resort_NN1 ._. 
The_AT reasons_NN2 for_IF this_DD1 'cushion'_NN1 between_II the_AT deposit_NN1 banks_NN2 and_CC the_AT central_JJ bank_NN1 are_VBR essentially_RR of_IO a_AT1 historical_JJ and_CC traditional_JJ nature_NN1 :_: in_RR21 short_RR22 ,_, the_AT reluctance_NN1 of_IO banks_NN2 to_TO seek_VVI finance_NN1 in_II cases_NN2 of_IO necessity_NN1 from_II a_AT1 sister_NN1 bank_NN1 ,_, even_RR a_AT1 special_JJ one_PN1 like_II the_AT central_JJ bank_NN1 ._. 
This_DD1 explains_VVZ why_RRQ the_AT development_NN1 of_IO an_AT1 active_JJ and_CC liquid_JJ inter-bank_JJ market_NN1 gradually_RR squeezed_VVN out_RP the_AT discount_NN1 houses_NN2 ._. 
The_AT secondary_JJ banks_NN2 segment_NN1 ,_, primarily_RR comprising_VVG accepting_VVG houses_NN2 ,_, overseas_JJ banks_NN2 and_CC foreign_JJ banks_NN2 ,_, appears_VVZ considerably_RR more_RGR heterogeneous_JJ ._. 
As_CSA mentioned_VVN earlier_RRR ,_, the_AT common_JJ factor_NN1 distinguishing_VVG them_PPHO2 from_II the_AT first_MD segment_NN1 was_VBDZ their_APPGE lack_NN1 of_IO direct_JJ access_NN1 to_II the_AT payment_NN1 mechanism_NN1 and_CC the_AT clearing_JJ arrangements_NN2 ._. 
Moreover_RR ,_, unlike_JJ deposit_NN1 banks_NN2 ,_, secondary_JJ banks_NN2 took_VVD the_AT bulk_NN1 of_IO their_APPGE deposits_NN2 on_II the_AT wholesalemarket_NN1 rather_II21 than_II22 the_AT retail_JJ market._NNU 1.2_MC The_AT 1970s_MC2 :_: more_DAR competition_NN1 ,_, secondary_JJ banks_NN2 '_GE crisis_NN1 ,_, the_AT Banking_NN1 Act_NN1 1979_MC One_MC1 of_IO the_AT system_NN1 's_GE most_RGT distinctive_JJ traits_NN2 ,_, the_AT deposit_NN1 banks_NN2 '_GE interestrate_JJ cartel_NN1 ,_, was_VBDZ abolished_VVN in_II 1971_MC with_IW a_AT1 series_NN of_IO measures_NN2 following_VVG on_RP from_II the_AT Bank_NN1 of_IO England_NP1 's_GE consultation_NN1 paper_NN1 'Competition_NN1 and_CC Credit_NN1 Controls_NN2 '_GE (_( CCC_NP1 )_) ,_, aimed_VVN at_II increasing_JJ competition_NN1 in_II the_AT banking_NN1 system_NN1 and_CC reviewing_VVG the_AT modus_NN121 operandi_NN122 of_IO monetary_JJ policy_NN1 ._. 
As_II a_AT1 matter_JJ31 of_JJ32 fact_JJ33 in_II the_AT same_DA year_NNT1 the_AT Bank_NN1 of_IO England_NP1 decided_VVD to_TO replace_VVI the_AT quantitative_JJ limits_NN2 imposed_VVN on_II all_DB banks_NN2 and_CC the_AT liquidity_NN1 ratio_NN1 imposed_VVN on_II clearing_JJ banks_NN2 with_IW a_AT1 new_JJ system_NN1 requiring_VVG all_DB banks_NN2 to_TO hold_VVI minimum_JJ reserve_JJ assets_NN2 equal_JJ to_II 12.5_MC per_NNU21 cent_NNU22 of_IO their_APPGE eligible_JJ liabilities_NN2 ._. 
The_AT 1971_MC measures_NN2 removed_VVD the_AT partition_NN1 separating_VVG the_AT two_MC market_NN1 segments_NN2 of_IO deposit_NN1 banks_NN2 and_CC secondary_JJ banks_NN2 and_CC permitted_VVD the_AT full_JJ entry_NN1 of_IO deposit_NN1 banks_NN2 into_II wholesale_JJ banking_NN1 (_( previously_RR they_PPHS2 had_VHD had_VHN only_RR indirect_JJ access_NN1 to_II the_AT wholesale_JJ market_NN1 through_II subsidiaries_NN2 )_) ._. 
This_DD1 had_VHD an_AT1 impact_NN1 on_II the_AT functioning_NN1 of_IO the_AT money_NN1 market_NN1 ._. 
In_II fact_NN1 ,_, prior_II21 to_II22 the_AT CCC_NP1 ,_, one_MC1 area_NN1 (_( the_AT discount_NN1 market_NN1 )_) fell_VVD within_II the_AT operational_JJ scope_NN1 of_IO the_AT deposit_NN1 banks_NN2 ,_, which_DDQ through_II the_AT discount_NN1 houses_NN2 'made'_VV0 the_AT money_NN1 market_NN1 and_CC had_VHD access_NN1 to_II central_JJ bank_NN1 discounting_NN1 ;_; the_AT second_MD area_NN1 (_( the_AT parallel_JJ money_NN1 market_NN1 )_) fell_VVD within_II the_AT scope_NN1 of_IO the_AT secondary_JJ banks_NN2 ,_, was_VBDZ not_XX covered_VVN by_II the_AT central_JJ bank_NN1 's_GE 'safety_JJ net'_NN1 and_CC was_VBDZ primarily_RR concerned_JJ with_IW the_AT Euromarket_NN1 ._. 
The_AT two_MC areas_NN2 had_VHD been_VBN kept_VVN separate_JJ to_TO prevent_VVI the_AT foreign_JJ sector_NN1 from_II interfering_VVG with_IW the_AT domestic_JJ money_NN1 market_NN1 ,_, in_II31 accordance_II32 with_II33 a_AT1 structure_NN1 which_DDQ was_VBDZ deemed_VVN to_TO meet_VVI the_AT needs_NN2 of_IO monetary_JJ policy_NN1 ._. 
The_AT absence_NN1 of_IO supervision_NN1 by_II the_AT Bank_NN1 of_IO England_NP1 allowed_VVD the_AT secondary_JJ banks_NN2 to_TO collect_VVI large_JJ amounts_NN2 of_IO unsecured_JJ funds_NN2 on_II the_AT secondary_JJ market_NN1 and_CC to_TO use_VVI them_PPHO2 to_TO provide_VVI finance_NN1 ,_, including_II long-term_JJ loans_NN2 ,_, for_IF the_AT construction_NN1 of_IO non-residential_JJ property_NN1 ,_, a_AT1 market_NN1 that_CST was_VBDZ booming_VVG in_II those_DD2 years_NNT2 ._. 
The_AT removal_NN1 of_IO quantitative_JJ limits_NN2 for_IF banks_NN2 in_II 1971_MC ,_, together_RL with_IW the_AT expansionary_JJ stance_NN1 of_IO monetary_JJ policy_NN1 despite_II the_AT high_JJ point_NN1 of_IO he_PPHS1 cycle_NN1 ,_, fuelled_VVD a_AT1 speculative_JJ bubble_NN1 in_II the_AT building_NN1 sector_NN1 ._. 
The_AT decision_NN1 ,_, taken_VVN towards_II the_AT end_NN1 of_IO 1973_MC ,_, to_TO raise_VVI the_AT discount_NN1 rate_NN1 led_VVN to_II a_AT1 problem_NN1 of_IO maturity_NN1 mismatching_VVG for_IF many_DA2 secondary_JJ banks_NN2 ._. 
In_II just_RR a_AT1 few_DA2 months_NNT2 both_RR house_VV0 prices_NN2 and_CC the_AT share_NN1 market_NN1 fell_VVD ._. 
25_MC secondary_JJ banks_NN2 paid_VVD the_AT price_NN1 ,_, but_CCB were_VBDR subsequently_RR saved_VVN thanks_NN2 to_II the_AT intervention_NN1 of_IO the_AT Bank_NN1 of_IO England_NP1 and_CC the_AT support_NN1 of_IO the_AT clearing_JJ banks_NN2 ,_, which_DDQ bought_VVD 16_MC of_IO the_AT banks_NN2 involved_JJ in_II the_AT crisis_NN1 ._. 
The_AT Bank_NN1 of_IO England_NP1 bore_VVD approximately_RR 10_MC per_NNU21 cent_NNU22 of_IO the_AT cost_NN1 of_IO the_AT bailout_NN1 ._. 
According_II21 to_II22 an_AT1 estimate_NN1 ,_, although_CS the_AT Bank_NN1 of_IO England_NP1 did_VDD n't_XX provide_VVI figures_NN2 ,_, it_PPH1 had_VHD to_TO put_VVI aside_RL 'a_UH remarkable_JJ total_NN1 of_IO about_II GBP100m_FO for_IF the_AT possible_JJ cost_NN1 to_II itself_PPX1 of_IO the_AT whole_JJ rescue_NN1 strategy'.The_NNU crisis_NN1 of_IO the_AT secondary_JJ banks_NN2 is_VBZ significant_JJ because_CS ,_, after_CS decades_NNT2 of_IO stability_NN1 ,_, it_PPH1 marked_VVD the_AT central_JJ bank_NN1 's_GE debut_NN1 in_II a_AT1 systemic_JJ bailout._NNU 'The_NN1 fact_NN1 that_CST the_AT central_JJ bank_NN1 ,_, a_AT1 state-owned_JJ body_NN1 ,_, accepted_JJ responsibility_NN1 for_IF potential_JJ losses_NN2 of_IO such_DA a_AT1 scale_NN1 ,_, with_IW a_AT1 resultant_JJ drop_NN1 in_II its_APPGE payments_NN2 to_II the_AT Nation_NN1 's_GE Exchequer_NN1 ,_, alone_RR makes_VVZ the_AT measures_NN2 taken_VVN to_TO deal_VVI with_IW the_AT secondary_JJ bank_NN1 crisis_NN1 a_AT1 matter_NN1 of_IO major_JJ public_NN1 interest'._NNU 1_MC1 The_AT Structure_NN1 of_IO the_AT Banking_NN1 System_NN1 Between_II the_AT 1960s_MC2 and_CC the_AT 1980s_MC2 This_DD1 chapter_NN1 can_VM be_VBI really_RR defined_VVN as'historic'_NN1 ,_, because_II21 of_II22 the_AT great_JJ changes_NN2 that_CST have_VH0 affected_VVN the_AT British_JJ banking_NN1 system_NN1 after_II the_AT 1980s_MC2 ._. 
Even_CS21 if_CS22 no_AT gap_NN1 can_VM be_VBI found_VVN in_II the_AT evolution_NN1 --_JJ institutional_JJ ,_, structural_JJ ,_, operational_JJ --_NN1 of_IO the_AT system_NN1 (_( 'historia_NN1 non_FU facit_NN1 saltus_NN1 '_GE )_) ,_, it_PPH1 's_VBZ undeniable_JJ that_CST the_AT present_JJ configuration_NN1 bears_NN2 only_RR a_AT1 thin_JJ resemblance_NN1 to_II the_AT previous_JJ morphology_NN1 ,_, legislation_NN1 ,_, functions_NN2 ._. 
At_II the_AT same_DA time_NNT1 ,_, this_DD1 retrospective_JJ view_NN1 of_IO the_AT banking_NN1 and_CC financial_JJ industry_NN1 ,_, also_RR in_II its_APPGE interactions_NN2 with_IW public_JJ policy_NN1 issues_NN2 and_CC cultural_JJ frameworks_NN2 then_RT prevailing_JJ ,_, is_VBZ useful_JJ in_BCL21 order_BCL22 to_TO put_VVI in_II focus_NN1 the_AT situation_NN1 of_IO today_RT ,_, and_CC to_TO understand_VVI better_RRR the_AT most_RGT recent_JJ turmoil_NN1 and_CC its_APPGE possible_JJ (_( not_XX necessary_JJ )_) outcomes_NN2 ._. 
To_TO be_VBI sure_JJ ,_, we_PPIS2 can_VM not_XX take_VVI the_AT whole_JJ period_NN1 from_II the_AT 1960s_MC2 through_II the_AT 1980s_MC2 as_II a_AT1 single_JJ bloc_NN1 ._. 
After_CS a_AT1 long_JJ and_CC relatively_RR undisturbed_JJ post-war_JJ phase_NN1 ,_, an_AT1 evolution_NN1 occurred_VVD that_CST ,_, broadly_RR speaking_VVG ,_, meant_VVD the_AT passage_NN1 from_II an_AT1 oligopolistic_JJ banking_NN1 structure_NN1 ,_, an_AT1 interest_NN1 rate_NN1 cartel_NN1 ,_, a_AT1 rather_RG protective_JJ environment_NN1 ,_, where_CS banks_NN2 could_VM almost_RR be_VBI considered_VVN as_CSA public_JJ utilities_NN2 ,_, and_CC from_II a_AT1 mostly_RR informal_JJ supervision_NN1 by_II the_AT central_JJ bank_NN1 ,_, to_II a_AT1 more_RGR dynamic_JJ environment_NN1 ,_, where_CS the_AT seeds_NN2 of_IO competition_NN1 were_VBDR sowed_VVN ,_, and_CC regulation_NN1 and_CC supervision_NN1 became_VVD more_RGR articulate_JJ and_CC statutory-oriented_JJ ._. 
The_AT driving_JJ forces_NN2 of_IO the_AT change_NN1 can_VM be_VBI found_VVN in_II some_DD sectors_NN2 of_IO the_AT banking_NN1 system_NN1 ,_, less_RRR bound_VVN by_II the_AT 'constraints'of_NN1 the_AT central_JJ bank_NN1 ,_, still_RR very_RG focused_JJ on_II the_AT narrow_JJ group_NN1 of_IO the_AT clearing_JJ banks_NN2 ,_, and_CC in_II the_AT openness_NN1 of_IO London_NP1 as_II a_AT1 financial_JJ centre_NN1 ,_, that_DD1 increasingly_RR attracted_VVN international_JJ banks_NN2 (_( particularly_RR American_JJ ,_, but_CCB also_RR branches_NN2 of_IO European_JJ banks_NN2 )_) ._. 
8_MC The_AT New_JJ Regulatory_JJ Framework_NN1 :_: The_AT Financial_JJ Services_NN2 Authority_NN1 It_PPH1 is_VBZ difficult_JJ to_TO find_VVI a_AT1 single_JJ ,_, major_JJ cause_NN1 for_IF the_AT creation_NN1 of_IO the_AT new_JJ regulatory_JJ framework_NN1 in_II the_AT UK_NP1 ,_, but_CCB several_DA2 factors_NN2 have_VH0 contributed_VVN to_II the_AT reform_NN1 ,_, that_CST have_VH0 spanned_VVN a_AT1 period_NN1 of_IO approximately_RR four-years_NNT2 ._. 
The_AT creation_NN1 of_IO complex_JJ financial_JJ intermediaries_NN2 had_VHD caused_VVN the_AT distinc-tions_NN2 that_CST had_VHD previously_RR characterized_VVN the_AT financial_JJ sector_NN1 to_TO become_VVI blurred_VVN ._. 
Banks_NN2 did_VDD not_XX appear_VVI to_TO be_VBI 'special'_JJ anymore_RR or_CC at_RR21 least_RR22 not_XX as_RG special_JJ ,_, as_CSA before_RT ,_, now_RT being_VBG in_II competition_NN1 ,_, both_RR on_II the_AT provision_NN1 and_CC on_II the_AT gathering_NN1 of_IO funds_NN2 ,_, with_IW other_JJ financial_JJ institutions_NN2 ,_, and_CC entering_VVG themselves_PPX2 into_II other_JJ fields_NN2 of_IO financial_JJ intermediation_NN1 ,_, while_CS the_AT regulatory_JJ structure_NN1 remained_VVD fragmented_JJ ,_, and_CC still_RR very_RG much_DA1 reliant_JJ on_II self-regulation_NN1 ._. 
The_AT availability_NN1 of_IO financial_JJ products_NN2 ,_, which_DDQ is_VBZ sometimes_RT difficult_JJ to_TO understand_VVI for_IF the_AT retail_JJ customer_NN1 ,_, raised_VVD a_AT1 problem_NN1 of_IO customer_NN1 awareness_NN1 and_CC protection_NN1 ._. 
This_DD1 problem_NN1 was_VBDZ compounded_VVN by_II the_AT misselling_NN1 of_IO some_DD products_NN2 ,_, particularly_RR pension_NN1 products_NN2 ,_, where_CS inadequate_JJ supervision_NN1 was_VBDZ found_VVN ._. 
The_AT stability_NN1 of_IO the_AT banking_NN1 system_NN1 had_VHD remained_VVN largely_RR intact_JJ ,_, but_CCB some_DD big_JJ failures_NN2 :_: the_AT cases_NN2 of_IO BCCI_NP1 and_CC Barings_NP1 ,_, raised_VVD questions_NN2 aboutthe_VV0 effectiveness_NN1 of_IO the_AT supervision_NN1 of_IO the_AT central_JJ bank_NN1 ._. 
The_AT idea_NN1 of_IO a_AT1 conflict_NN1 of_IO interest_NN1 between_II the_AT regulatory_JJ and_CC supervisory_JJ function_NN1 ,_, and_CC the_AT monetary_JJ policy_NN1 function_NN1 ,_, was_VBDZ strongly_RR supported_VVN and_CC pointed_VVN to_II a_AT1 separation_NN1 of_IO the_AT two_MC functions_NN2 ,_, and_CC the_AT need_NN1 for_IF them_PPHO2 to_TO be_VBI allocated_VVN to_II different_JJ bodies_NN2 ._. 
The_AT models_NN2 of_IO supervision_NN1 available_JJ are_VBR numerous_JJ ,_, as_CSA the_AT experience_NN1 of_IO diverse_JJ countries_NN2 demonstrates_VVZ ,_, but_CCB can_VM be_VBI summarized_VVN under_RG three_MC headings_NN2 :_: the_AT single_JJ regulator_NN1 ;_; the_AT twin_NN1 peaks_NN2 regulation_NN1 ,_, where_CS supervision_NN1 is_VBZ split_VVN according_II21 to_II22 the_AT purpose_NN1 :_: prudential/stability_FU on_II one_MC1 side_NN1 ,_, transparency/conduct_NN1 of_IO business_NN1 on_II the_AT other_JJ ;_; and_CC regulation_NN1 by_II sector_NN1 (_( banks_NN2 ,_, securities_NN2 firms_NN2 ,_, insurance_NN1 ,_, etc_RA ._. )_) ._. 
Variations_NN2 may_VM exist_VVI for_IF each_DD1 model_NN1 ,_, and_CC their_APPGE distinction_NN1 is_VBZ ,_, in_II fact_NN1 ,_, not_XX so_RG clear-cut_JJ as_CSA theoretically_RR possible_JJ ._. 
The_AT role_NN1 of_IO the_AT central_JJ bank_NN1 may_VM range_VVI in_II its_APPGE extension_NN1 ,_, but_CCB it_PPH1 is_VBZ never_RR totally_RR out_II21 of_II22 the_AT supervision_NN1 perimeter_NN1 ._. 
Britain_NP1 's_GE choice_NN1 has_VHZ been_VBN the_AT single_JJ regulator_NN1 ,_, the_AT FSA_NP1 ,_, and_CC a_AT1 role_NN1 on_II macro-systemic_JJ oversight_NN1 attributed_VVN to_II the_AT Bank_NN1 of_IO England_NP1 ,_, that_DD1 keeps_VVZ anyway_RR the_AT lender-of-last_JJ resort_NN1 responsibility_NN1 ._. 
This_DD1 choice_NN1 is_VBZ based_VVN on_II consideration_NN1 of_IO cost-effectiveness_NN1 ,_, economies_NN2 of_IO scale_NN1 and_CC scope_NN1 ,_, on_II the_AT opportunity_NN1 of_IO a_AT1 uniform_JJ approach_NN1 to_II regulation_NN1 ,_, and_CC on_II consumer_NN1 protection_NN1 and_CC financial_JJ crime_NN1 prevention_NN1 ._. 
The_AT stability_NN1 issue_NN1 is_VBZ not_XX damaged_VVN ,_, in_II the_AT legislator_NN1 's_GE view_NN1 ,_, by_II the_AT division_NN1 of_IO responsibilities_NN2 between_II the_AT regulator_NN1 and_CC the_AT central_JJ bank_NN1 that_CST is_VBZ between_II the_AT micro-supervisor_NN1 and_CC the_AT macro-oversighter_NN1 :_: the_AT linkage_NN1 between_II the_AT FSA_NP1 and_CC the_AT Bank_NN1 rests_VVZ on_II a_AT1 Memorandum_NN1 of_IO Understanding_NN1 (_( that_DD1 includes_VVZ the_AT Treasury_NN1 )_) and_CC is_VBZ assured_VVN by_II a_AT1 continuous_JJ contact_NN1 between_II the_AT two_MC ._. 
