The papers collected in this volume are those presented at the twelfth
Colloquium arranged by the Societe Universitaire Europeenne de Re-
cherches Financieres (SUERF) which took place in Cambridge in March
1985. The Society is supported by a large number of central banks,
commercial banks and other financial and business institutions, by
treasury officials and by academics and others interested in monetary
and financial problems. Since its establishment in 1963 it has developed
as a forum for the exchange of information, research results and ideas,
valued by academics and practi- tioners in these fields, including
central bank officials and civil servants responsible for formulating
and applying monetary and financial policies. A major activity of SUERF
is to organise and conduct Colloquia on subjects of topical interest to
members. The titles, places and dates of previous Colloquia for which
volumes of the collected papers were pub- lished are noted on the last
page of this volume. Volumes were not produced for Colloquia held at
Tarragona, Spain in October 1970 under the title 'Monetary Policy and
New Developments in Banking' and at Stras- bourg, France in January 1972
under the title 'Aspects of European Mone- tary Union'.