Lift For Savings Level

Press, Volume CIII, Issue 30406, 3 April 1964, Page 3

Lift For Savings Level

(Special Crspdt. N.Z P.A.) LONDON. April 2. Bank participation in the savings bank field in New Zealand would lift the level of the country’s savings and thus assist the financing of new development, said the chairman of the Australia and New Zealand bank. (Sir Geoffrey Gibbs) in an article in a banking supplement issued by the “Guardian.”

Because of this, he says, it was to be hoped that the banks’ campaign for this right would be ultimately successful. In common with Australia, the New Zealand trading banks had been encouraged by the Government to provide medium-term finance for approved categories of borrowers, Sir Geoffrey Gibbs said. However, the banks were still not permitted entry into savings banking, nor were they allowed to increase their holdings of Government securities, either by direct purchase or by way of investment in the newly-recognised short-term money market “As would be expected,” Sir Geoffrey Gibbs said. “New Zealand has been enjoying a prosperity based on improved export prices and earnings and, according to the Prime Minister in his New Year message, the internal situa-

tion is one of ‘rapid expansion, buoyant business conditions, and rising production.’ “Increased export earnings have, however, been offset by rising expenditure on imports, with the result that in 1963 New Zealand’s overseas reserves showed little or no increase. “In these conditions monetary policy has continued to be moderately restrictive, with the degree of restraint mainly dependent upon whether or not bank lending complies with official targets. “These targets, although making allowance for a growth of advances, do set very definite limits on the rate of increase. In addition, bank lending continues to conform with official directives which accord priority to the needs of export producers, essential services, and other similar borrowers.