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'corset' (E5)<br />The method of Bank of England control over commercial banks' liabilities in force from December 1973 to June 1980. A limit was placed on the amount of banks' sterling deposits and foreign currency deposits lent in sterling: if the limit was exceeded, a special deposit, bearing no interest, had to be lodged at the Bank of England. Banks objected to the way in which it encouraged companies to lend directly to each other rather than using banks as intermediaries. The removal of the corset led to an upsurge in the money supply.<br /><em>See also:</em> disintermediation
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