Between 1980 and 1985 the British growth rate averaged 7.7% per annum. Employment increased by 18% and real wages increased by 31%. This impressive record was unfortunately not observed throughout the economy but restricted instead to one sector: inancial services. This sector and its relationship to the rest of the economy is the subject of this issue. As financial services go through one of their most radical restructurings of this century, this Assessment-analyses the factors underlying these changes. A picture of the function of different financial institutions emerges which allows the concerns that have been expressed about recent developments in financial markets to be re-evaluated. The worrying implication is that systems for correcting substantial financial disruption are not yet in place.