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Improving the system of internal control through regulation: cases of small-sized building societies, circa 1960

Author

Listed:
  • Batiz-Lazo, Bernardo
  • Noguchi, Masayoshi

Abstract

Following the previous research conducted in Noguchi and Bátiz-Lazo (2010), this study aims to analyzes how the system of internal control entailing the effectiveness of the management and governance of building societies were improved within individual societies following the Building Societies Act, 1960 (BSA60). By specifically focusing on and comparing the process to reform the systems of internal control executed at two small-sized building societies, i.e. Lloyds Permanent and Eagle Building Societies, this study also purports to analyze how the improvement of the system of internal control affected the management and governance of both societies. The two cases examined in this study prove that an order, forbidding some activities by a building society, recognized to the CRFS under the regulation of BSA60 provided an important opportunity for the building societies to reform their systems of internal control and that the improvement of the system of internal control could have an important impact upon the management of the small-sized building societies in the UK, as a necessary condition for the withdrawal at an early stage of the order once made.

Suggested Citation

  • Batiz-Lazo, Bernardo & Noguchi, Masayoshi, 2011. "Improving the system of internal control through regulation: cases of small-sized building societies, circa 1960," MPRA Paper 28564, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:28564
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    References listed on IDEAS

    as
    1. Benston, George J & Smith, Clifford W, Jr, 1976. "A Transactions Cost Approach to the Theory of Financial Intermediation," Journal of Finance, American Finance Association, vol. 31(2), pages 215-231, May.
    2. Peter Scott, 2008. "Marketing mass home ownership and the creation of the modern working-class consumer in inter-war Britain," Business History, Taylor & Francis Journals, vol. 50(1), pages 4-25.
    3. Douglas W. Diamond, 1984. "Financial Intermediation and Delegated Monitoring," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 51(3), pages 393-414.
    4. Townsend, Robert M., 1979. "Optimal contracts and competitive markets with costly state verification," Journal of Economic Theory, Elsevier, vol. 21(2), pages 265-293, October.
    Full references (including those not matched with items on IDEAS)

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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. The Economic History of Banking
      by bbatiz in NEP-HIS blog on 2011-11-05 14:42:56

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    More about this item

    Keywords

    the system of internal control; BSA60; the Chief Registrar of Friendly Societies (CRFS); the Treasury; building societies; supervision of retail financial intermediaries; delegated monitoring; UK;
    All these keywords.

    JEL classification:

    • N8 - Economic History - - Micro-Business History
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • N24 - Economic History - - Financial Markets and Institutions - - - Europe: 1913-

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