Template-type: ReDIF-Paper 1.0
Author-Name: Avner Offer
Author-Workplace-Name: All Souls College, University of Oxford
Author-Email:avner.offer@all-souls.ox.ac.uk
Title: Narrow banking, real estate, and financial stability in the UK, c.1870-2010
Abstract: Banking in the UK was stable for more than a century after 1866. Financial institutions 
were differentiated according to function. The core banks did not engage in maturity transformation, 
but in managing a payments system for business. Real estate was a potential source of instability 
due to high credit elasticity of demand and to long maturities, but credit was successfully rationed 
by building societies, who relied on the funds that their savers had actually withdrawn from consumption.
After 1945, credit rationing came under pressure from consumers and housebuyers. Incremental 
liberalisations after 1971 released a tide of credit which created a property windfall economy. 
Borrowers and lenders both prospered until the system collapsed under its own weight in 2007.
X-Classification-JEL: 
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Length: 32 pages
Creation-Date: 2013-06-02
Number: _116
File-URL: http://www.economics.ox.ac.uk/materials/papers/12768/offer116.pdf
File-Format: application/pdf
Handle: RePEc:nuf:esohwp:_116