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The article examines the behaviour of two leading English clearing banks, the Midland and Westminster, during periods of financial distress suffered by a sample of business clients during the early postwar decades. Such periods provide valuable insight into the nature of bank–business relationships at that time for, in a sense, bank reaction during periods of financial difficulty for client firms helps define the limits to bank support and commitment to such firms. The article examines the banks'' behaviour within the context of a transaction bank model (as opposed to what might be termed a relationship bank model) and the results are compared with those of an earlier study by the authors of pre-First World War bank practice. The results show that the banks did operate many of the control mechanisms associated with transaction banking and that the proficiency of such controls ensured that the banks'' interests remained reasonably secure even for the high risk loans under study. Importantly, however, the evidence also shows that the banks did not exercise a stark choice between, on the one hand, supporting clients while relying upon traditional control mechanisms, and, on the other, withdrawing support. In a significant number of cases, the banks were prepared to invest in gathering more information on a client''s business, and in trying to influence the direction of that business. This suggests a more informed and interventionist approach by the banks in these cases compared to the findings in the pre-1914 study. For the sample of cases examined, it seems that while much of the behaviour of the two banks remained consistent with the transaction bank model, compared to our pre-1914 findings there was also a greater tendency towards a more flexible, ‘hands-on’ approach in extremis. In these cases, English bank behaviour was similar in some respects to that of the more interventionist European banks, and less like that predicted by the transaction bank model. [ABSTRACT FROM AUTHOR]

Examines union merger discussions in the clearing banks in London, England. Prospects and obstacles to the merger between the Banking Insurance and Finance Union and the Clearing Bank Union; Importance of ideological differences and the proposed distribution of power in the negotiations; Internal political factors in explaining merger patterns; History of the inter-union rivalry.

The decision of the clearing banks to introduce an apparently new managerial discipline called marketing into their operations may come to be regarded by future business historians as an important turning point in the development of personal banking in England. The purpose of article is to examine the organizational consequences, associated problems and levels of satisfaction with the introduction of marketing as perceived by the senior management of the English clearing banks. This article is interested primarily in two possible influences on an individual's perception of the effects of introducing marketing into the bank. One is the bank itself, as manifested in such things as its objectives, corporate style, commitment, market situation and approach to innovation. The other is the individual's level of responsibility within the bank's organizational hierarchy. The study does not concern itself with the influence of personality variables. While these will affect any one individual's perceptions, it is assumed that when the research findings are aggregated for one bank or one level of responsibility the sample will contain a reasonable cross section of personality types. Further it is assumed that these personality types will not cluster by bank or level of responsibility but will be homogeneously distributed across all banks.

Commercial banks tend to make profits which are not associated with efficiency in resource use. Since the output of bank deposits is subject to government control, the industry tends to generate a surplus over competitive profits, and this is particularly so when a collective agreement prevents the payment of interest on demand deposits, or the implicit interest payment is below the competitive rate and lags behind the changes in the rate of earnings on bank assets. In 1967, the National Board for Prices and Incomes reported that the London clearing bank profits had been '...excessive in the sense that they have accrued in part simply from a high average level of Bank Rate...'.[1] The report referred to an 'endowment element' in the profits which originated from the clearers' collective agreement on non-payment of interest on demand deposits: although the bank charges on demand deposits were being netted for an offsetting allowance, a surplus was generated because '... the rate of offsetting allowance does not appear to vary immediately with Bank Rate...'.[2] In view of the legal protection granted to the clearing banks, the report did not reveal the absolute magnitude of their profits or its estimate of the 'endowment element' in these profits.[3] The main object of this paper is to attempt to quantify this 'endowment element' defined as the sensitivity of the clearing bank profits to a change of one percentage point in Bank rate during 1951 - 70.[4] A model of the determinants of the clearing bank profits is constructed for this purpose, and is also used for putting a figure on the excess profits accruing to the banks during this period. [ABSTRACT FROM AUTHOR]