THE RESERVE BANK

Gisborne Times, Volume LXXXIV, Issue 12887, 13 June 1936, Page 2

THE RESERVE BANK

HOW TRADING BANKS ARE AFFECTED. SIR G. ELLIOT EXPLAINS. (Special to the Times.) WELLINGTON, June 12. During the course of the annual meeting of the Bank of N.Z. to-day, Sir G. Elliot said that recent legislation had made important amendments to the Reserve Bank of N.Z. Act. “The private shareholdings in the bank have,” he continues, “been purchased by the Government at the approximate price ruling at the date of the recent elections. Tho jiresent directors will continue to retain office during the pleasure of the Governor-Gcncral-in-Council. “Power is given to the bank to regain to and control credit and currency in New Zealand, tho transfer of moneys to or from New Zealand, and tho disposal of moneys that ai’e derived from tho sale of any New Zealand products. Tho bank is authorised to grant accommodation by way of overdraft fo. the purpose of financing tho purchase and marketing of any New Zealand produce. The accommodation that the. bank may grant, to tho Treasury has been incieased from one-half of the.revenue, or estimated revenue for tho year, to tho full amount of the revenue for the year. The limitation of the amount of New Zealand Government securities, or securities of the Government o.‘ the United Kingdom, with an imexpired currency of more than three months, which tho Reserve Bank previously was authorised to hold, has been removed. The Reserve Bank has been empowered also to J’.ndovwrito New Zealand loans. “Tho Act as amended gives the Minister of Finance power to suspend either absolutely or conditionally as he thinks fit, the duty of the Reserve Bank to give, sterling in exchange for its notes. Under tho original Act, trading hanks were required to maintain balances with tho Reserve Bank amounting to not less than 7 per cent, of their demand liabilities and 3 per cent, of their time liabilities. The Act as amended gives power to the Governor of the Bank, acting with the authority of the Minister of Finance, to vary these percentages but so. that the- balances required to ho maintained shall not at any time, lx; less than those now existing. “It will he seen that the Government has taken very full powers indeed to regulate and control credit and currency in New Zealand.”