ABSTRACT
In order to understand the development of British financial intermediaries and to be able to assess the implications of the changing functions of those intermediaries, it is first necessary to consider the broad evolution of the British financial system as a whole. The nature and limits of activities within the various financial markets which comprise the financial system obviously have a very significant influence on the evolution of individual intermediaries, whilst the existence of the markets themselves depends upon the interaction of specific groups of intermediaries as well as other participants. Hence the developments of institutions and of markets are to a large extent mutually dependent, and the direction of cause and effect of observed changes in operations may be somewhat controversial. However, this particular analytical problem does not preclude consideration of the broader implications of identified changes in the activities of institutions, although it does add to the difficulty of determining the cause of those changes and hence of predicting likely future developments.
