Research Discussion Paper – RDP 8904 Changes in the Behaviour of Banks and Their Implications for Financial Aggregates


This paper is one of a series of papers about monetary policy and the economy. The focus of this particular paper is the way banks have changed their behaviour as a result of the process of deregulation that began in the 1970s and accelerated in the 1980s.

The principal theme of the paper is the shift from asset management to liability management that accompanied deregulation. This change in particular has had implications for the behaviour and interpretation of financial aggregates.

The paper is largely historical but includes some comments on recent changes, including to SRD arrangements.

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