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t mortgage or loan.

In 1984, an informal but effective cartel linking the building societies dissolved after Abbey National broke ranks,(2008 Abbey bank merger with European bank Santander) .by the time , many of the large societies viewed the “big four” and other banks as their main competitor. The building societies Act (1986) took effect in January 1987, and allowed building societies to offer a full range of retail banking services typical of a bank. The Act specified the financial activities a building society could undertake, namely:

offering a money transmission service through cheque books and credit cards.

personal loans, unsecured.

foreign currency exchange.

investment management and advice.

stock broking.

provision and underwriting of insurance,

expansion into other Eu states.

real estate services.

However, there important restrictions: 90% of the building society's asset had to be resident mortgage, and wholesale money plus deposit could not exceed 20% of liabilities, subsequently raised to 40% then 50%.

In 1986 act also gave these organisations the option of converting to bank status and as a results, the number of building societies fell dramatically as table1.1 shows

Table 1.1 Number of banks and building societies 1985-2005

…………………………………………………………………………………………………………..

Years Authorised uk incorporated MBBG building institutions members societies

……………………………………………………………………………………………………………

The investment banking industry is dominated by major us and European banks including Goldman sachs, Morgen Stenly, Lehman Brothers, Merrill Lynch, uBS, Deutsche bank and credit Suisse. In additions the main uk banks also have investment banking subsidiaries (e.g. Barclays Capital). There are few independent uk merchant banks as most have been acquired by overseas investment and commercial banks.

Recent Changes in Retail banking structure.

To operate in the retail markets, bank have traditionally required an extensive branch network. However, technological developments in particular the growth in automated teller machine (ATM) networks, telephone/internet banking, mobile phones and interactive digital television have enabled a new type of bank to emerge that does not need branches to conduct business. In uk the pioneer was First Direct, which began as a telephone bank in 1989 and is an operation of HSBC, one of the large clearing banks. By 2002 First Direct had around 1 million customer and offered a full range of retail bank services, from cheque accounts to personal loans. Over half of the customers First Direct regularly use internet to access their account. Most of the other established banks in the uk have followed the lead of HSBC and started up a remote banking service that allows customers to access their account using the telephone, internet or mobile phone. The british Bankers' association (2002) reported that, in 2001, one third of all bank accounts were accessed through the telephone or internet. Of these remote transactions, it is the internet that now dominates, accounting for 167 million transaction in 2001 compared with 127 million telephone transactions. In late 1980s numbers of branch declined because of technology innovation. the introduction of ATMs (at the