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A recurrent theme of this book is the changing role of banks and the implications of this for the law.

It is an especially pertinent theme when considering the advisory and transactional liability of banks. The fact is that banks now enter, on their own behalf and for customers, a range of transactions which, even comparatively recently, have been regarded as unusual even within the universal banks. Banks also market to customers or prospective customers their own financial products, some of considerable complexity. The opportunities for incurring transactional liability are thus much greater, including liability for what is said in relation to themAdditionally, banks have promoted themselves as financial advisers to customers although, since they are often advising on finan cial products of their own devising, they cannot be regarded as indepen dent advisers in the traditional sense. Again there is a source of potential liability, independent perhaps of any transaction entered into. Thirdly, instead of mandating the disclosure of specific information, legislation sometimes places the responsibility of deciding whether to disclose on banks themselves. The legislation may be permissive or mandatory. The Criminal Justice Act 1988 is an example of the permissive approach: it protects a bank from breach of confidentiality if it discloses to the police the basis for a 'suspicion or belief about money-laundering. There is no obligation on the bank to disclose, and it might well decide not to risk alienating a customer or, worse, being successfully sued because a court later decides that the disclosure was not protected by the section or by any other countervailing public inter est. Section 52 of the Drug Trafficking Act 1994 is an example of the mandatory approach: it is an offence for a bank not to inform the police of a suspicion that a customer is engaged in drug-money laundering. The section is based on the European Community Directive on money laundering. Consistently with Article 9 of the Directive, disclosure under the section does not constitute a breach of confidence. Suspicion is something less than belief: it may occur with activity on an account which is out of character, such as an unexplained series of new credits, or an increase in value of regular, existing credits.

Bankers' opinions in response to so-called status inquiries were wellestablished in the nineteenth century in the context of taking bills of exchange in payment. As a leading nineteenth-century writer on banking noted:If [a trader should] take the bill to the banker's, at whose house it is made payable, and say, 'Gentlemen, I will thank you to inform me if the accepter of this bill be a respectable man May I safely give goods or money in exchange for it?' They will reply, 'Sir, we never answer such questions to strangers.' But if the holder of this bill keeps an account at a banker's he has only to ask his banker to make the inquiry for him, and he will easily obtain the most ample information. Among nearly all the bankers in London, the practice is established of giving information to each other as to the respectability of their customers. For as the bankers them selves are the greatest discounters of bills, it is their interest to follow this practice; it is indeed the interest of their customers also, of those at least who are respectable. The opens with a discussion of the general principles governing a bank's liability. The topic can be approached in various ways. One involves a consideration of the relevant doctrines in English lawwhereby banks can incur liability. Section I of the selects just a few such doctrines. Another approach considers the various factual matters which feed into legal decisions about bank liability. The same factors recur across different legal doctrines: indeed, they arise for consideration as well in other systems of law. This is the focus of section II of the . Next, the considers advisory liability (section III). This can arise in two ways a failure to advise where the law imposes a duty to do so, and a failure to advise adequately when a bank assumes the task of advising a customer or third party. Then in section IV the turns to the English law doctrines undue influence, unconscionability, and duress which have a particular application to transactions involving those the law regards as vulnerable. In the main these doctrines need not trouble a bank dealing with commercial parties.