The Boom which Got Out of Hand

Shortly after the introduction in September 1971 of Competition and Credit Control (C and CC), the liberating new deal for the banking world, Mr Edward Heath’s Conservative Government adopted an economic growth strategy which implied an expansionary monetary policy. The combination of these two developments provided the signal for Britain to embark on a major financial spree. C and CC had removed various discriminatory restrictions on the bigger banks and, in the buoyant climate, no adequate new restraints were imposed instead. The way was thus clear for competition across the banking board in a euphoric atmosphere. All banks, large and small, were looking for business and it became increasingly tantalising to the slower-moving to see the rich profits made by the swifter-footed. Competition was free, but there seemed plentiful room for all: any idea that, because the larger banks had freer scope to expand, the fringe concerns would wither away was proved false while the boom lasted. Increasing fortunes were made by many with large stakes in the newer entrepreneurial banking ventures, though whether they were fully retained depended on later events.