Capturing Regulation Under Imperial Rule: The Regulation of Palestine’s Banking Sector

Abstract

During the 1930s, the British government in Palestine introduced new regulation for the country’s banking sector. This regulation brought about a sharp decline in the number of banks and consolidated the large banks’ position in the country. Contrary to prior accounts of the subject, which view the regulation as a welcome governmental response to an unstable banking sector, in this article I argue that the main forces behind the regulation were the British Barclays Bank (Dominion, Colonial, and Overseas) and the Zionist Anglo-Palestine Bank. Based on governmental reports and internal banking correspondence, I show how, despite the opposition of local credit institutions, these two large banks successfully pushed for regulations that benefited them at the expense of their smaller competitors. The regulation of Palestine’s banking sector is therefore a case study of regulatory capture in the context of the British Empire.