AUSTRALIAN BANKING

Press, Volume LXXXIX, Issue 26970, 20 February 1953, Page 9

AUSTRALIAN BANKING

GOVERNMENT TO SET UP NEW BANK (Bee. 19.p.m.) CANBERRA, Feb. 19. The frank design of the Federal Government’s banking legislation was to protect the existing banking system from unfair attack by a central bank operating under a government with socialist aims, said the Prime Minister (Mr Menzies) in the House of Representatives today when he introduced the legislation. “A future government could find ways of dominating the Bank Board for its own political purposes and within the law as it now stands, and subject private banks to unfair and unscrupulous attack,” Mr Menzies said. The legislation was designed to remove the fear that private trading banks could be victimised in the future. Under the legislation, the new institution. to be called the Commonwealth Trading Bank of Australia, would take over the general banking functions at present performed by the Commonwealth Bank. The new bank would be clothed with all the powers required to carry on general banking business. The debts of the Commonwealth Trading Bank to its customers and creditors would be guaranteed by the Commonwealth.

The new bank’s general manager would be appointed by the GovernorGeneral on. the recommendation of the Commonwealth Bank Board, and would hold office for a fixed period not exceeding seven years. Policy matters concerning the Commonwealth Trading Bank would, however, still be determined by the Commonwealth Bank Board.