Page 4 Advertisements Column 1

Star (Christchurch), Issue 17244, 10 January 1924, Page 4

WHAT IS THE BANK RATE? From time to time we hear of the bank rate, being reduced or increased, but many people have no idea what this actually means. The bank rate is the minimum amount of interest charged by the Bank of England on loans and so on. The Bank can—and usually does —charge higher rates than the official bank rate, but the figure quoted is the lowest possible. The bank rate has no legal power over other banks and financial establishments. Why, then, is the bank rate regarded as so important in the money market? The reason is that there are times when the combined resources of other banks, running into many millions of pounds, are insufficient to meet the demands made upon them. In such cases the only other help available is from the Bank of England. This is not a public institution; it is a private bank with its own directors. as the bankers of the Government its credit is naturally greater than that of other firms, and it is of the Bank that help is asked when other sources fail. Consequently the rate of interest charged is of supreme importance in the world of finance. The Bank of England usually charges one. half per cent, more for loans than the published bank rate. SAILORS AND HAPPINESS. Tho sailor is often like an Irishman. When lie is happy he is very happy, when he is sad lie is very sad indeed. —Earl Beatty,