Heritage Bank

About Heritage Bank

London and County Securities Bank collapsed in December 1973 during the UK secondary banking crisis. London and County had grown rapidly through aggressive lending funded by wholesale deposits. The bank made illiquid property loans. When property prices fell and funding dried up, the Bank of England organized a lifeboat rescue. Approximately 30 banks received support. The crisis led to closer supervision of secondary banks. The Bank of England increased its regulatory role, setting standards for capital and liquidity. The secondary banking crisis was one of the first postwar banking crises in a developed economy. It preceded the more serious sovereign debt crises of the 1970s and 1980s. The crisis has been largely forgotten but established important precedents for bank rescues and regulatory reform.