BANK LENDING.

Taranaki Central Press, Volume IV, Issue 414, 22 April 1937, Page 7

BANK LENDING.

OUR CREDIT SYSTEM. “Anything But Monopoly.” “I hav. never heard of anyone decrying the idea of lodg'ng money in a bank, but the tame c nno, be said of the other side of the business — he lending of m.mey by th bank which, in my opinion, is just '.iere the banking system is mos useful to the n/vlion,” said Mr P L. Porter, manager of the Bank of New Zealand, in Christchurch, sp aking at the annual meeting of the Canterbury Economic Society. "Now tha.t we have the Reserve Bank, the responsibility for the ■■ xchange nite, the no e if sue and the quanti’adve volume of credit has passed Io it,” continued Mr Port. r. “But the Reserve B nk has also become one of the departments of th? Governrn nt, and the lat'er is the real arbi er of these d licate m u t?rs in New Zealand. The Reserve Bank has not be n established long enough to enable us to judge of the results of its operations, but in the somewhat rudimen ary financial world of New ZeaYind I should imagine that it has not had a great d al of scope.” Referring to advances by the trading banks, Mr Porter said that the oanks had anything 'but a monopoly of lending in New Zealand. “The banker may have ample mon ( y to lend, but no satisfactory borrowers to make use of it. This was the .case for some yeiars, and it is only another phase of the unemployment problem. Though it is often said that bank advanc s create bank deposi .s, we have had in New Zealand the spectacle of bank advances declining and bank deposits increasing at one and th? same time. Tn fact, this is the norm?] fluctuaion in New Zealand, though it apmvts to contradict the idea that the orig n of bank deposits is bank advances.”