TRADING BANKS

Wairarapa Times-Age, 12 November 1941, Page 5

TRADING BANKS

.INCREASED GOVERNMENT CONTROL ACTION IN AUSTRALIA. FEDERAL PRIME MINISTER’S ASSURANCE. (By Telegraph—Press Association—Copyright), CANBERRA, November 11. The Australian trading banks yesterday accepted the Commonwealth Government’s proposals for increasing its control over them. This was the outcome of a four-hour conference, convened by the Prime Minister, Mr Curtin. 1 Acceptance of the proposals, however, was dictated by the recognition that, despite objections to Government control, regulation of banking during the war is inevitable. The bankers showed little fear that the Labour Government would use its new powers as a back-door method for nationalisation of banking. Their only fear was that the public might misconstrue the Government’s plan as foreshadowing drastic action against the banks, resulting in progressive loss of confidence in the private banking system. Mr Curtin gave a definite assurance that the Government had no intention of doing anything of the sort. Actually, the Government’s new powers, he said, gave depositors a greater measure of security, as no bank would be permitted to fail during the war. If any weakness were detected in any bank’s financial structure, he said, the Government would take immediate action to safeguard the interests of depositors, who would be doubly safeguarded by having not only the bank’s guarantee but, in addition, the backing of the Commonwealth Government. He further emphasised the fact that the conference would enable greater strength to be invoked for national purposes in the public interest. Mr Curtin outlined the Government’s intentions for the future control of the trading banks, and said the Government and the banks were sure they could resolve all the problems confronting the monetary system. The Government had no intention of compelling the banks suddenly .to lodge huge deposits with the Commonwealth Bank.