To avoid another banking crisis like the one we have seen a smaller banking sector is desirable, said David Miles, a member of the Bank of England's Monetary Policy Committee.

Miles said many factors that led to the spectacular growth of banks will change and some of them had changed already. He said the growth of the industry inn the run-up top the crisis did not primarily reflect the efficiencies created by delegating monitoring to bank credit assessors. He said the optimism about the