In light of the periodic malfunctions in important sectors of the finan­ cial services industry in recent years, such as commercial banking, thrift institutions, and the securities market, numerous proposals have been developed for restructuring the financial system to improve both its safety and efficiency. Among the groups analyzing the performance of the financial system and recommending changes where necessary, has been the Shadow Financial Regulatory Committee. This Committee, which is described in greater detail in Chapter 1, consists of 12 independent banking experts from the academic and practitioner worlds that meet quarterly to analyze current developments in the financial services indus­ try and to make recommendations for improvements that would be in the public interest. The purpose of the Committee, its members, and a listing of policy statements are included in the Appendix. All but one of the chapters in this volume represent essays by indi­ vidual members of the Committee on issues discussed by the Committee at recent meetings and that, for the most part, resulted in policy state­ ments. They basically discuss the reasons for the policy statement adopted and place the issue in perspective. Where appropriate, the rele­ vant section of the respective policy statement is presented at the begin­ ning of each chapter. Each essay, however, reflects only the views of the individual author and not necessarily those of other members of the Committee or of the Committee as a whole.