Economics at your fingertips  

Accounting for dominance and submission: Disciplining building societies with accounting-based regulation, circa 1960

Bernardo Batiz-Lazo and Masayoshi Noguchi
Additional contact information
Masayoshi Noguchi: Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan

No DP2011-34, Discussion Paper Series from Research Institute for Economics & Business Administration, Kobe University

Abstract: This paper examines how accounting-based regulation modified the operation of one type of participant in British retail finance. Specifically, the House Purchase and Housing Act, 1959 and Building Societies Act, 1960 gave the Registrar of Friendly Societies new powers of intervention and these were used to discipline building societies revealing inadequate use of their funds. Although only a tiny fraction of existing societies were ultimately sanctioned, they all observed important deviations from specified accounting-based criteria that were generally recognized as financially sound within the industry. Intervention, however, was also motivated by two other factors: the successful lobbying by the Building Society Association to discipline non-members; and attempts by the Registrar to stop property developers from abusing moribund London-based societies. Results provide enough evidence to suggest that other studies' assessment that managers of British retail financial intermediaries disregarded accounting information in executive decisions need to be revised in light of the fact that the accounting control of building societies was supplemented by the disciplinary power granted to state regulators (as represented by the Treasury and the Registrar of Friendly Societies).

Keywords: Accounting-based regulation; House Purchase and Housing Act, 1959; Building Societies Act, 1960; Chief Registrar of Friendly Societies; HM Treasury; the Building Societies Association; disciplinary power; reserve ratio; property developers. (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-acc, nep-his and nep-reg
Date: 2011-12
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed

Downloads: (external link) First version, 2011 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Access Statistics for this paper

More papers in Discussion Paper Series from Research Institute for Economics & Business Administration, Kobe University 2-1 Rokkodai, Nada, Kobe 657-8501 JAPAN. Contact information at EDIRC.
Bibliographic data for series maintained by Office of Promoting Research Collaboration, Research Institute for Economics & Business Administration, Kobe University ().

Page updated 2018-07-25
Handle: RePEc:kob:dpaper:dp2011-34