The BANKING SYSTEM OF the UK

A strong and efficient Banking system is a cardinal to come on in a country.To achieve an efficient a banking system one should analyse the internal and external factors of that state. For this issue I have chosen ENGLAND banking system to cognize its internal and external factors faced by its Bankss? what kinds of Bankss are runing in United Kingdom? , what kinds of activities are performed by them? what are the beginnings of finance in United Kingdom? what is the development of banking in United Kingdom? what is the function of cardinal bank in uk? … etc

First of all a inquiry rise in our head what is meant by system? System is an incorporate aggregation of different portion of a organic structure which performed specific map for illustration banking system of United Kingdom it has many Bankss in parts which perform different maps like commercial banking, investing banking, specialized banking and cardinal bank jointly known as banking system of uk.In uk banking system it has a cardinal bank which is Bank of England.IT is the caput of all the Bankss it control and modulate the matter of all schedule Bankss like HSBC, Barclay Bank and ROYAL BANK OF SCOTLAND all these Bankss trades in twenty-four hours to twenty-four hours maps of having sedimentations and progressing fundss to the public.Banking system stableness depend upon the external factors such as salvaging, national income, industrial growing and development, authorities policies and internal factors such as bank ability to impart the sedimentation safely to the borrowers usually industrial sector.

Benefits of a strong banking system in United Kingdom is that it will steer the idle financess from the custodies of depositor to the 1 who required such fundss to put It in that topographic point which is utile for the development of the uk.Strong banking system of United Kingdom is playing an of import function in increasing the economy of the people by supplying inducements by giving them attractive involvement rates.The banking system of United Kingdom is besides helpful for the creative activity of new industries by supplying fundss to the industrial sector.The banking system of United Kingdom is besides supplying fundss for the publicity of trade and commercialism.

Banks provide finance to the industry and the populace every bit good and bear down involvement on it and gain net income for the bank.A inquiry comes in our head are Bankss chief finance supplier for the industry externally or other sector contribute in it the most.i have gone through an article of colin mayer.in this article he compare the investing activities and beginnings of acquiring the finance in venture capital in some states like United Kingdom, Germany Japan and other states he concluded that the souces of financess and investing differ in different states due to fiscal system, economic status, geographical factors and sectors difference.For illustration the sum of fund required in Germany and Japan are chiefly cover from Bankss, corporation beginnings in Israel and pension financess beginnings in UK.

Beginnings of finance analysis

In ENGLAND 44 % OF THE FINANCES ARE COVER FROM BANKS BUT MAIN SOUCE IS PENSION FUNDS WHICH SHOWS 49 % FINANCIAL SOURCING MEAN IN INDUSTRY.

Following informations shows the beginnings of external finance for the industry in the four diferrent states, showed some of import facts. In Germany, Bankss provide the chief beginning of finance for the VC industry, and pension financess. By contrast, in the ENGLAND pension financess provide the chief beginning of finance for the VC industry, other institutional investors, and single investors PLAY AN IMPORTANT ROLE IN FINACEING THE INDUSTRY OF MANY COUNTRIES as many companies as Bankss. Contrary to popular positions, authorities atorities besides play an of import function for ( typically local authorization ) support plays a more of import function in the United Kingdom than it does in Germany, and is negligible in the other states.

Table 1. Beginnings of external financess for the VC industry

This tabular array studies beginnings of financess of VC houses in Germany, Israel, Japan and the United Kingdom based on binary and non reciprocally sole responses to a inquiry of whether or non a peculiar fund uses a certain beginning. Panel A shows the proportion of financess that report utilizing a given beginning. Panel B displays the per centum of financess utilizing one, two, three, or four or more beginnings.

A Mean values which are statistically different from those of the United Kingdom at the 10 % degree.

A Mean values which are statistically different from those of the United Kingdom at the 5 % degree.

Beginnings of financess for the Israeli VC are Bankss from the above figure it is shown, with industrial corporations ( typically from the United States ) being the individual most popular beginning of financess. In Japan, not banking fiscal establishments ( e.g. , securities houses, recognition card or renting companies and mortgage establishments ) are the individual most of import class of finance among Nipponese financess, followed by Bankss and insurance companies.9 It is rather common in Japan for the owners/providers of finance for Nipponese VC financess to be all affiliated with the same bank-centered corporate group, or to be otherwise related to each other. In over half of the Nipponese financess in our sample, at least three of the five largest stockholder suppliers of finance are related to each other or affiliated with the same group.

VC financess in Germany tend on norm to utilize fewer beginnings of financess than do VCs in other states ( Table 1, Panel B ) . By contrast, financess in Israel, Japan and the United Kingdom tend to utilize many beginnings of finance ; in peculiar, about a 3rd of the UK financess study utilizing at least four different sources.10 Relying entirely on bank finance is besides really common in Germany: over 60 % of the VC financess that raise money from Bankss use this beginning entirely ; the corresponding figure for the United Kingdom is about one-third, and for Israel about one-fifth. Surprisingly, despite the typical word picture of the Nipponese economic system as bank dominated ( like Germany ) , merely one-seventh of the Nipponese VC financess in our sample rely entirely on bank finance.

1

Development OF Banking IN UK AND ITS DEVELOPMENT STAGES:

The birth of modern UK Banks

Strange as it may look, UK banking can follow its beginnings back to the yearss of the Roman conquering. During the period of the Roman conquering of Britain, Romans ‘ conducted two signifiers of banking concern: one, called argentarii, of a professional nature ; the other, called feneratores, of an recreational nature run by the elect Lords of the Roman Empire.

What was said to characterize this establishment was the double service of ( a ) receiving sedimentations and ( B ) progressing recognition. “ Modern ” UK Bankss evolved in the 1530s. , it was non truly until about 400 old ages ago, during the mid-1600s, that London truly started to do its place as a fiscal anchor of importance when goldworker bankers started to emerge, following King Charles I ictus of gold deposited in the Tower of London and the English Civil War, as a safe-haven ( off from the seizing weaponries of the Crown! ) for the aristocracy and nobility to lodge their money and valuables. Shortly after this period ( circa. 1677 ) , there were a recorded 44 goldworker bankers in London moving as ‘keepers of running hard currency ‘ – who ran their concern on a ‘personal liability footing ‘ . However, rigorous legal controls on how large goldworker bankers could go ( because of the rigorous ‘personal liability footing ‘ ) , together with hapless transit and communicating, combined to curtail the growing of these into national UK Bankss [ evidenced of this can be seen in the fact that in 1784 the entire figure of UK Bankss exceed 100 ; but merely 7 had more than one office ] .

The air current of alteration

Following a figure of outstanding UK bank prostrations in the early 1820s, parliament eventually relaxed the Torahs regulating who could have Bankss to let for joint stock banking ( 1826 ) [ A noteworthy exclusion to this was the constitution of the Bank of England as a joint stock bank some 200 old ages before this statute law ] .

Importantly, joint stock banking allowed the proprietors of UK Bankss to distribute the hazard among a figure of owners. This, combined with the Industrial Revolution, better transit and faster agencies of communicating all resulted in a growing of more national Bankss in the UK. Prominent among these was the foundation, in 1833, of the National Provincial Bank of England ( subsequently to go National Westminster Bank – NatWest ) , the first UK bank established with the specific docket of being a national bank.

Although UK Bankss began to spread out nationally during this period, the services they ( did and could ) offered did non. Consequently, it was besides around this clip that another division in UK Bankss began to emerge ; viz. the formation of the Big Three banking sectors:

1. Uncluttering “ High Street ” Banks – even every bit late as 1900 there were a reported 250 private and joint stock Bankss runing in the UK ;

2. Merchant Banks ; and

3. Other fiscal establishments ; such as Building Societies – which came into being undermentioned 1874 statute law

The Bank of England founded in 1694 to move as the Government ‘s banker and debt-manager. Since so its function has developed and evolved, centred on the direction of the state ‘s currency and its place at the Centre of the UK ‘s fiscal system.

The history of the Bank is really interesting one. Events and fortunes over the last three hundred or so old ages have alteration and influenced the function and duties of the Bank. They have adopted the civilization and traditions, every bit good as the expertness, of the Bank which are relevant to its repute and effectivity and responsibilities a cardinal bank in the early old ages of the 21st century.The history of the Bank passed different state of affairs and fortunes of to the economic and fiscal history, political history, of the United Kingdom.

If you want to acquire closer to the Bank ‘s history and are sing London, the Bank ‘s Museum provides a alone penetration into the history of the Bank and its concern, alongside a great trade of stuff about the Bank today.

Cardinal minutes in the Bank ‘s history – a brief usher

King William & A ; Queen Mary

When William and Mary came in 1688, public fundss were non strong. The system of money sedimentation and progressing it ( recognition ) was in non working expeditiously. At that clip a national bank was needed to mobilise the economy and investing, the state ‘s resources.

MR Willium Peterson

William Paterson proposed a loan of ?1,200,000 to the Government. In return the endorsers would be able to integrate the Governor and Company of the Bank of England.

The Royal Charter

The money was raised in a some hebdomads and the Royal Charter was sealed on 27th July 1694. The Banking started life as the Government ‘s banker and debt-manager, with 17 clerks and 2 gatekeepers. In 1734 the Bank moved to Thread-needle Street, bit by bit geting land and premises to make the site seen today.

Commercial maps of the Bankss

The Bank managed the histories of that clip Government ‘s and made loans available to finance disbursement at times of peace and war. A commercial bank took sedimentations and issued notes.

The eighteenth Century

During the eighteenth Century the Government borrowed more and more money. These outstanding loans were called the National Debt.

1781: reclamation of the Bank ‘s Charter

Dependence on the Bank of England was such that when its charter was renewed in 1781 it was define as ‘ the public ex checker ‘ .

The bankers ‘ bank

By now the Bank was moving as the bankers ‘ bank excessively. It was apt to neglect if all its depositors decided to retreat their money at the same clip. But the Bank made certain it kept plenty gilded to pay its notes on demand.

The ‘Restriction Period ‘

By 1797 war with France had drained the gold militias. The Government prohibited the Bank from paying claims of its notes in gold. This Restriction Period lasted until 1821.

The nineteenth Century

The 1844 Bank Charter Act tied the note issue to the Bank ‘s gold militias. The Bank was required to maintain the histories of the note issue separate from those of its banking operations and bring forth a hebdomadal sum-up of both histories. The Bank Return, as it ‘s called, is still published every hebdomad.

Lender of last resort

In the nineteenth Century the Bank took on the function of loaner of last resort, supplying stableness during several fiscal crises.

The First World War: 1914-18

During the First World War the National Debt jumped to ?7 billion. The Bank helped pull off Government adoption and resist inflationary force per unit areas.

Gold

In 1931 the United Kingdom left the gilded criterion ; its gold and foreign exchange militias were transferred to the Treasury. But their direction was still handled by the Bank and this remains the instance today.

Nationalization 1946

After the Second World War the bank was nationalised. It remained the Treasury ‘s advisor, agent and debt director.

Fiscal crises

During the 1970s, the Bank played a cardinal function during several banking crises. The Bank was at the bow when pecuniary policy once more became a cardinal portion of Government policy in the 1980s.

Operational independency May 1997

In May 1997 the Government gave the Bank duty for puting involvement rates to run into the Government ‘s stated rising prices mark. The was enshrined in the 1998 Bank of England Act.

Pull offing the modern bank

The Bank ‘s regulating organic structure, the Court of Directors, as it ‘s known, is made up of the Bank ‘s Governor and 2 Deputy Governors, and 9 Non-Executive Directors ( under the Banking Act 2009

There are different sorts of Bankss which are working in different parts of the universe chief Bankss are as follows all these Bankss are specialize in executing speacialized maps of banks.on the footing of different types of maps we have the undermentioned bank

Bank of England is the cardinal bank of England perform fuctions of monetory policy, financial policy.issue of notes, bankers Bankss, loaner of last resort to other Bankss

Alliance HYPERLINK “ hypertext transfer protocol: //www.alliance-leicester-group.co.uk/ ” & amp ; HYPERLINK “ hypertext transfer protocol: //www.alliance-leicester-group.co.uk/ ” Leicester plc

Based in the UK, provides personal and concern clients a comprehensive scope of mortgage, investing, personal banking and insurance merchandises, hard currency transmittal services and corporate banking installations.

BankHYPERLINK “ hypertext transfer protocol: //www.bank-of-ireland.co.uk/ ” of Ireland

Personal and concern banking in Britain.

British HYPERLINK “ hypertext transfer protocol: //www.bankfacts.org.uk/ ” BankersHYPERLINK “ hypertext transfer protocol: //www.bankfacts.org.uk/ ” Association

Principal representative organic structure for Bankss active in the UK, with over 300 member Bankss from more than 60 states.

HSBC Midland HYPERLINK “ hypertext transfer protocol: //www.banking.hsbc.co.uk/ ” Bank

Personal and concern banking division of HSBC.

BankHYPERLINK “ hypertext transfer protocol: //www.bankofireland.co.uk/ ” of Ireland – Northern Ireland

Bank that provides private and corporate services worldwide.

BankHYPERLINK “ hypertext transfer protocol: //www.bankofscotland.co.uk/ ” of Scotland

Fiscal establishment that provides personal banking, small-business banking and corporate services.

Barclays

Bank offers personal banking, pupil banking and international corporate banking.

Bermuda Monetary Authority

Responsible for the licensing of Bankss, sedimentation companies and investing concerns.

Bradford HYPERLINK “ hypertext transfer protocol: //www.bradford-bingley-int.co.im/ ” & amp ; HYPERLINK “ hypertext transfer protocol: //www.bradford-bingley-int.co.im/ ” Bingley International

Subsidiary of Bradford & A ; Bingley Building Society, a nest eggs and loan bank.

Bristol HYPERLINK “ hypertext transfer protocol: //www.bristol-west.co.uk/ ” & amp ; HYPERLINK “ hypertext transfer protocol: //www.bristol-west.co.uk/ ” West

Specialists in mortgages, nest eggs and investings.

Cheltenham HYPERLINK “ hypertext transfer protocol: //www.cheltglos.co.uk/ ” & amp ; HYPERLINK “ hypertext transfer protocol: //www.cheltglos.co.uk/ ” Gloucester

Provides mortgages, investings, nest eggs and loans.

HSBC Investment HYPERLINK “ hypertext transfer protocol: //www.cibm.hsbc.com/hsbc ” Bank

Provides the consultative and funding, equity securities, plus direction, private banking and legal guardian, foreign exchange and capital markets trading, debt support and exchequer activities of the HSBC Group.

Citibank UK

Provides personal banking in the UK.

Co-operative HYPERLINK “ hypertext transfer protocol: //www.co-operativebank.co.uk/ ” Bank

Provides banking services including Internet banking.

BankNet

Provides online Banking Service. A joint venture between MarketNet and Secure Trust Bank PLC.

Coutts Group

International private banking arm of the Royal Bank of Scotland Group offering investing, fiducial and banking merchandises.

First Direct

Member HSBC Group.

Halifax

Fiscal establishment that provides personal fiscal services including mortgages, long-run nest eggs histories, place, motor and creditor insurance, retail banking, consumer recognition and portion covering.

Hamilton Direct HYPERLINK “ hypertext transfer protocol: //www.hdb.co.uk/ ” Bank

Division of HFC Bank PLC which provides unbarred personal loans and recognition card merchandises in the UK.

Julian Hodge HYPERLINK “ hypertext transfer protocol: //www.jhb.co.uk/ ” BankHYPERLINK “ hypertext transfer protocol: //www.jhb.co.uk/ ” Group

Banking and fiscal services group owned by the Carlyle Trust.

Legal HYPERLINK “ hypertext transfer protocol: //www.landg.com/ ” & amp ; HYPERLINK “ hypertext transfer protocol: //www.landg.com/ ” General Assurance Society

Insurance company offering fiscal merchandises including mortgage, investing, nest eggs and place, life and wellness insurance.

Leeds City Credit Union

Fiscal concerted offering nest eggs and loans merchandises to employees of selected employers in the Leeds country.

Lloyds HYPERLINK “ hypertext transfer protocol: //www.lloydstsb.com/homepage/0,1001, general,00.html ” Bank

Fiscal establishment that provides personal banking, small-business banking and corporate services.

Lombard

Fiscal establishment that provides personal banking, small-business banking and corporate services.

National Savings HYPERLINK “ hypertext transfer protocol: //www.nationalsavings.co.uk/ ” & amp ; HYPERLINK “ hypertext transfer protocol: //www.nationalsavings.co.uk/ ” Investings

One of the largest nest eggs administration in the UK that offers nest eggs and investing merchandises guaranteed by the Government to personal rescuers and investors while lending towards the Government ‘s support demands.

NatWest

Fiscal establishment that provides personal banking, small-business banking and corporate services.

Northern Rock

Bank that offers nest eggs histories, sedimentation histories, residential mortgages, investing mortgages and seaward nest eggs histories.

Prudential

Supplier of portfolio direction services, fiscal advice, mortgages and personal loans.

Royal HYPERLINK “ hypertext transfer protocol: //www.rbos.co.uk/ ” BankHYPERLINK “ hypertext transfer protocol: //www.rbos.co.uk/ ” of Scotland

Bank specializes in corporate, private and offshore banking, every bit good as retail banking and private motor insurance.

Scotiabank Group

International Canadian banking group that provides retail, commercial, corporate, investing and international banking services to clients around the Earth.

Smile

Internet bank, portion of the Co-operative Bank PLC.

Standard HYPERLINK “ hypertext transfer protocol: //www.standardbank.com/ ” BankHYPERLINK “ hypertext transfer protocol: //www.standardbank.com/ ” London

International merchandiser bank of the Standard Bank Group that offers specializer banking services and promotes trade, investing and concern flows with an emerging market focal point on a world-wide footing.

Standard Chartered HYPERLINK “ hypertext transfer protocol: //www.standardchartered.com/ ” Bank

International commercial banking group supplying consumer, corporate and institutional banking and exchequer merchandises and services with a focal point on emerging markets in Asia, the sub-continent, the Middle East, Africa and Latin America.

Standard Life HYPERLINK “ hypertext transfer protocol: //www.standardlifebank.com/ ” Bank

Subsidiary of The Standard Life Assurance Company that provides mortgages, nest eggs and on-line banking.

Triodos HYPERLINK “ hypertext transfer protocol: //www.triodos.co.uk/ ” Bank

UK subdivision of the Dutch trust bank that offers nest eggs histories and investings merchandises financing undertakings with societal and environmental benefits.

Virgin Direct Personal Financial Service Ltd.

Bank that offers nest eggs histories, sedimentation histories, residential mortgages, investing mortgages and seaward nest eggs histories.

Woolwich

Financial services organisation that provides mortgages, loans, investings, banking and insurance merchandises and services.

List OF BANKS OF ALL THE BANKS IN ENGLAND OPERATING TILL 2010

Uk major Bankss

THERE ARE 116 BANKS OPERATE IN UK ACCORDING TO FSA web site

“ There are three types of Bankss, High Street Banks, Building Societies, and

Direct Banks. High Street Banks are the chief Bankss, such as Royal Bank of

Scotland, HSBC, NatWest, Citibank, and Barclays. Constructing Societies such as

Woolich, Abbey National, and Halifax were created for those who wanted to

save in order to purchase a house and offer reasonably much the same services as the

other Bankss. Direct Banks such as Co-op ( Smile.co.uk ) and First Direct

do n’t hold subdivisions, but you can bank at First Direct at the Post Office

and Co-op bank at their grocery mercantile establishments. They are telephone Bankss which

hold grown in popularity over the last few old ages… ”

Different Types of Banks

* High Street Banks and Building Societies

High Street Bankss and edifice societies are commercial banking concerns

whose primary market is consumer finance. These are the most common Bankss

you will meet.

* Investment Banks

An investing bank is a fiscal company, securities house or securities firm

house that purchases new issues of securities from private corporations and

offers them to their clients. They form a mob in order to sell these

securities to their clients and the general populace.

* Private Banks

Private Banks typically provide a more personal and customised set of

services than high street Bankss. Marketed to persons with big incomes

or high personal wealth, opening a private bank history normally requires a

really big minimal sedimentation.

* Online-Only Banks

Online-only Bankss offer the same services as traditional High Street Bankss

or edifice societies through electronic banking and the Internet. They

usually do non hold subdivisions for their clients to utilize. Besides online-only

Bankss nevertheless, a figure of High Street Bankss besides offer on-line services.

The banking system in the UK is extremely concentrated with the top 10 Bankss holding over 90 % of market portion.

In recent old ages, the coming of cyberspace banking has provided a new beginning of income, but, at the minute the banking system is still dominated by these top 10 Bankss.

Number

Bank

Headquarterss

Assetss ?m )

Assetss ( $ m )

1.

HSBC Bank

London

662,710

1,267,777

2.

Royal Bank of Scotland

Edinburgh

583,467

1,124,108

3.

Barclays Bank

London

522,089

1,005,857

4.

HBOS

Edinburgh

442,881

853,255

5.

Lloyds TSB

London

279,843

539,146

6.

Standard Chartered

London

73,543

141,688

7.

Alliance & A ; Leicester

Leicester

49,967

96,266

8.

Northern Rock

Newcastle upon Tyne

42,790

82,439

9.

Co-operative Bank

Manchester

39,000

71,327

10.

Bradford & A ; Bingley

Bingley

35,458

68,313

Note: Recent amalgamation of HBOS and Lloyds TSB

This is a unsmooth usher to the biggest 10 British Bankss.

Some interesting facts about British Bankss.

They employ 0.5million people

Banks and fiscal services contribute ?70bn to the UK ‘s national end product ( 6.8 % of GDP )

Banks and fiscal services provide 25 % of entire corporation revenue enhancement ( ?8bn ) to the UK Gov

The chief retail Bankss provide over 125m histories, clear 7bn minutess a twelvemonth and ease 2.3bn hard currency backdowns per twelvemonth from its web of over 30,000 free ATMs

Banks provide banking services to 95 % of the UKs population

The value of foreign exchange concern passed through London every twenty-four hours is ?560bn ( $ 1 trillion )

WHAT ARE THE ACTIVITIES PERFORME BY THESE TEN BANKS?

HBFC

July 25, 2017