‘Competition and Credit Control’: The Sequel
These are the developments after the introduction of C.C.C. in September 1971. In June 1972 there was a run on sterling, and the pound was floated; at the same time the sterling area came to an end with the extension of exchange control between the U.K. and the rest of the sterling area. In 1973 and even more in 1974 a number of undertakings found themselves in financial trouble. But it is convenient to begin by noting two changes in the framework of the system. The first is a consequential change, and not of fundamental importance: the replacing of Bank rate by a Bank of England Minimum Lending rate. The other is a change of substance: the introduction of a quantitative controlling mechanism to prevent the credit position getting out of hand: the system of Supplementary Special Deposits.
KeywordsInterest Rate Credit Risk Foreign Currency Money Market Economic Uncertainty
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