Rise of consortium banking

Abstract

A consortium bank is a bank that is owned by a strategic alliance of other banks. In the spectrum of joint-enterprises in banking, consortium banks lie between loose associations, such as correspondent relationships or ‘banking clubs’ (see below), and more formal alliances cemented through share transactions or full mergers. The 1960s and 1970s saw the formation of a large number of consortium banks in the major international financial centres. In London, they even had their own club, the Association of Consortium Banks formed in 1975. Most of the members of this body were consortium banks according to the Bank of England’s definition of that year — banks in which no other bank had a shareholding of over 50 per cent and which had two or more banks as shareholders, at least one of which should be a bank not incorporated in the UK.¹