A CENTRAL BANK

Hokitika Guardian, 16 November 1932, Page 5

A CENTRAL BANK

PROPOSED ESTABLISHMENT.

SUPPORT .OF AUSTRALIAN BANKER.

AUCKLAND, November 14,

The establishment of a Central Bank in New Zealand' has an advocate in Mr E. O’Sullivan, general manager of the English, Scottish, and Australian Bank of Melbourne, who arrived at Auckland by the Niagara on a holiday visit. Owing to the constitution of the Bank of New Zealand Mr O’Sullivan holds that .a Central Bank for the Dominion could be establisued in conjunction with it. “The Commonwealth Bank in Australia has functioned in a manner which has given general satisfaction to the trading banks,” Mr O’Sullivan said. “It has proved‘of great assistance in the time of economic stress through which the country has been passing, and I think the principle of establishing a reserve bank in New Zealand could be adopted with benefit to the Dominion. The Bank of New Zealand is a very keen competitor of the other trading banks, hut the manner in which th e Government is interested in it lend weight to the suggestion that a watertight compartment might be set up within tlie bank to operate a 6 a Central Bank. This would lie convenient and,-would save much of the expense attendant on the ‘setting up of a now and distinct institution.”

: With perhaps only one exception, the :trading hanks in Australia regarded New Zealand’s exchange position with something akin to envy, Mr O’Sullivan continued. There was no logical reason why the Australian rate should be as high as 25 per cent. Australian currency was depreciated at a time when “sterling” and “gold” were praotically synonymous terms. Now that had been depreciated it meant a total cVoveciatmu in Australian currency of about 60 per cent.