CO129-555-6 Banking crisis 24-9-1935 - 18-10-1935 — Page 39

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compilation and publication by Government of a quarterly

summary of banking business generally in Palestine without

disclosing the names or respective position of the

individual Banks.

24. We may now turn to items (b) and (c) of our terms

of reference which are as under:-

"To consider the practicability of and to make

25.

recommendations regarding

(b) fixing a minimum cash reserve as a percentage

of deposits;

(0)

limiting the use of short-dated deposits or

current accounts to short-dated investments.

It is the fact everywhere that only a very small

proportion of the public have sufficient knowledge or

acumen to form any opinion from the most informative of

published statements as to whether the standing of a Bank

is good or bad. It is also the fact that in Palestine

many of the small Banks which have in our opinion an

inadequate amount of capital invested in the business also

lack the necessary knowledge or experience of banking

demanded of bankers. It is important therefore that as

far as practicable depositors should be protected from the

danger of certain of the local Banks being unable to repay

deposits on due date or on demand owing to investments

imprudently made from the point of view of security or

period.

26. In the first instance, we endeavoured to treat

(b) and (c) of our terms of reference separately; but our

deliberations brought us to the conclusion that the

problems are to a great extent identical in their object

of ensuring the liquidity of assets sufficiently to meet

claims of depositors for withdrawals.

27.