All the different areas of activity would have a body of practitioners to represent their collective interests.
The Bank found dealing with the leaders of these associations, and giving them the responsibility to set standards or stamp out activities it disapproved of, was more effective than trying to police individual firms. Peer pressure worked because being expelled from the association would effectively deprive a firm of the relationships it needed to do business. The Bank, in turn, could exert pressure on associations because they never knew when they might need it for support.
Trade associations survived the decades of upheaval in the City, but the appointment last week of Simon Lewis to head the investment bankers' association AFME strikes a different tone. The elder brother of former Telegraph editor Will Lewis, his pedigree stretches from Buckingham Palace to Downing Street, and includes corporate giants such as Natwest, Centrica and Vodafone. His appointment signals that the prime purpose of the organisation is no longer to keep members in line. Instead it is to grow into an American-style lobbyist, whose role is to make representations to politicians in order to protect members' interests. The most important skill a CEO can have in such an organisation is to understand how the levers of power work in Whitehall and the media.
There are a couple of precedents. The BVCA, which represents private equity, appointed Buckingham Palace and big company veteran Simon Walker when it got into trouble with politicians. The British Bankers' Association brought in Angela Knight, a Treasury minister in John Major's government, to make sure its voice was heard as the banking crisis raged. So Lewis is not quite the first, but he is the biggest.
The interesting thing is how many others will follow down this route. The success of the banks in avoiding penal retribution for the crisis will surely encourage others to think whether they too should up their game.
Anthony Hilton is City commentator on London's Evening Standard