Housing i money plan criticised
The Minister of Housing (Mr Holland) has been criticised for his proposal to release more money through savings banks for housing loans. The managing director of the Canterbury Building Society (Mr H. F. Redmond) said that if the Minister wanted savings banks to become the prime source of non-state housing finance instead of building societies, as in the past, he should say so regardless of the maxim of not “borrowing short to lend long.” Rerouting money for housing finance had resulted in doing nothing for the building industry. “It is understandable that, as a member of the board of trustees for a savings bank for many years, he has generated a great deal of sympathy for savings banks, which have their place and do an excellent job in the cowimunity, but one would expect a Minister of the Crown to view the mort’ gage market as a whole,” said Mr Redmond. He said that Mr Holland’s dilemma in endeavouring to satisfy house seekers, without giving the building industry a sudden lift while the economy was in bad shape, could be understood. However, his releasing
of 1 per cent of Govern-ment-security ratios required to be held by the savings banks to free an extra S33M for the mortgage market looked like he was making political capital out of robbing Peter to pay Paul. “It appears that all he is doing is returning to the building industry, through the savings banks, the funds siphoned off building societies which had their Govern-ment-security ratios increased by 10 per cent recently,” said Mr Red’ mond. “The Minister’s stated policy is that all lending institutions should have equal Government-security ratio requirements but common sense dictates that any Government should have regard to current liabilities and require the highest Governmentsecruity ratios where the proportion of short-term deposits is greatest. “The building societies have most of their money subscribed on a contractual basis for up to 25 years, whilst savings banks have most of their funds on demand. “Prudent management warrants more like a 75 per cent liquidity ratio than 45 per cent or thereabouts in any institution where funds are at call.”
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Press, 27 August 1977, Page 5
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360Housing i money plan criticised Press, 27 August 1977, Page 5
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