Roy Goode's legal versatility, and penetrating analysis, are evident in banking as in other areas of commercial law. He has covered the traditional areas such as bills of exchange, letters of credit, and the banker-customer relationship in two editions of Commercial Law and in several illuminating articles.1 He has also examined modern banking practices: there is the seminal book on payment, Payment Obligations in Commercial and Financial Transactions ( 1983), his thought-provoking lecture, 'The changing face of banking and finance: some legal implications',2 and his most recent work on securities systems.3
At a more fundamental level, however, is Roy Goode's work on matters such as abstract payment undertakings, markets, and contractual types and structures.4 All banking laywers will benefit from the frameworks used and insights provided, as well as from the conceptual analysis offered. This article draws on some of this deeper work.5 The issue to be addressed is some of the ways in which banks relate to each other. The discussion revolves around legal impact and legal consequences, in this case of various types of interbank relations. These relations are contractual in nature; the concept of the network usefully encapsulates the scope of the discussion.
The network of contracts between banks takes various forms. First, contracts might be part of a chain, as with payment.6 Secondly, the concept of network covers bilateral transactions between banks (a transfer of funds, a____________________