INTRODUCTION

Since 1945, Britain’s financial services have been subject to considerable change, both in the scale of their contribution to the domestic economy, and in their character and operation. It is no surprise that the expansion of this sector and its success in relation to other key sectors has attracted the attention of economic historians. Dynamism within financial services seems to offer fertile ground for those seeking to explain the pattern and pace of recent economic development within the British economy, especially given its contrast with continued de-industrialisation in Britain during the last quarter of the twentieth century (see, for example, Clarke 1986: 186; Rybczynski 1988; Hutton 1995).

The most significant developments in this sector were concentrated in the 1980s and 1990s, these years seeing a wave of regulatory reform, increased fluidity of institutional functions, and a large growth in the scale of financial business undertaken. During the 1960s there had been increasing pessimism regarding the durability of Britain’s role as a dominant player in international financial markets, with financial services being seen as another casualty of Britain’s supposed relative economic decline. Yet, for much of the 1980s, London’s position as a financial centre seemed, once again, to be secure. Deregulation appears to have provided a strong positive impetus to the sector, augmenting expansion already evident within it. Business increased significantly, but economic recession during the late 1980s and early 1990s combined with various ‘financial scandals’ (including, for example, the Guinness, Barlow Clowes, and Maxwell pension fund crises) to deepen concern that liberalization of the regulations governing financial services might have gone too far, and was in fact creating new sources of instability.