BANKING
,« - A FEDERAL MOv’E.' (Australian Press Association.) SYDNEY, June 22. Addressing, the Institute ot Accountants, Sir Alfred Davidson, general manager of the Bank of New iSoutli Wales, diiected attention to proposed Federal legislation xvhicli xx ill require trading banks, to keep a percentage of their total deposit liabilities as a. cash deposit xvitli ithe Commonwealth Bank. He emphasised that this was bound to lead to a drastic reduction in advances, causing v decline in business activity, incomes and employment.
He indicated that the deposit wouiu be, about 10 per cent of the total cash balances. . Consequently,, to protect their depositors, trading banks would be laced with the need for finding additional cash in order to meet the compulsory minimum deposit require- . ments. Existing liquid items could not j provide the additional cash ; thus the 1 only way was' to reduce advances, which I would probably lead to serious, depression.
Sir Alfred* Davidson added that the proposed legislation would disturb Ihe development of the Australian banking system from the linos of tin* well-tried flexible English system and produce a revolutionary change bringing the undesirable rigidities which had proved! sq unsatisfactory in other countries.
No official intimation has yet been made concerning the legislation referred to by Sir Alfred Davidson,
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Bibliographic details
Hokitika Guardian, 23 June 1938, Page 6
Word Count
208BANKING Hokitika Guardian, 23 June 1938, Page 6
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