ABSTRACT
The ties of the Scottish banks with London are one aspect—an institutional one—of their relation to the wider monetary system of the United Kingdom. We must now consider other, and broader, aspects of this relation. In particular, we must look at how they stand as vehicles of those policies by which the monetary authorities pursue internal and external stability. But before we see how the various instruments of monetary policy impinge on the Scottish banks we must first probe into a question which is a central one in all discussion of monetary policy: the determination of the volume of bank credit. What we have to consider is whether and in what ways the peculiarities of the Scottish banks influence the processes by which the quantity of bank credit is determined. To answer this we must make a journey along a difficult and, at times, obscure trail, through regions of theory which have yet to be completely mapped out.
