RESPONSE TO “FREEZE”

Press, Volume CIV, Issue 30900, 5 November 1965, Page 1

RESPONSE TO “FREEZE”

(From Our Own Reporter)

WELLINGTON, November 4

Lending institutions and businesses made advance payments of almost £300,000 to the Reserve Bank during September, the first month of the 12months current Government credit squeeze to freeze surplus funds.

The bank reports the re-

sponse in a bulletin issued today. It says those involved include finance companies, hire-purchase organisations, stock and station agents, wholesale and retail houses, thrift and credit societies and other organisations. Separate agreements to increase investments in Government stock have been made with the larger trustee savings banks, the private savings banks and insurance companies.

The “fringe” banking institutions have been asked to place in Government securities an amount equal to 7.5

per cent of all new advances written or advances made under hire-purchase contracts or extended credit arrangements including leasing or factoring operations, but excluding normal monthly credit accounts.

Amounts of new advances for car, light truck or motorcycle purchases, either new or second-hand, but not for trucks, tractors and other vehicles, are to be excluded. For their subscriptions, the institutions will get special Government stock yielding 5 per cent, renewable or redeemable after a year.