TIGHTER CREDIT

Press, Volume C, Issue 29638, 7 October 1961, Page 10

TIGHTER CREDIT

Trading Banks’ Conunent (N.Z. Press Association) WELLINGTON, Oct 6. Mr J. W. Rowe, research officer of the New Zealand Bankers’ Association, commented today on the Government’s announcement of intensified pressure on credit, and said: “Trading bank advances have declined relatively slowly in the last six months because of the tempo of business activity and heavy importing has continued, with a consequent build-up of stocks.

“The trading banks have done their best, in accordance with the Government’s wishes, to restore balance to the economy without causing forced sales, abandonment of projects already begun, or interference with essential production.

“The credit squeeze is already being applied stringently, but it will have'to be intensified. This will not be easy without affecting production and business activity, although every effort will be made to avoid undue disturbance of the economy. ‘"Hie Government has, so far/relied on a credit squeeze operating solely through the trading banks to achieve tl.e necessary reduction in spending, but the banks would reemphasise that Government financial policies must reinforce tighter credit policies if quick results are to be achieved.”