Financial Notes
RISE IN BANKING DEPOSITS.
JUST before markets began to be adversely affected by the Abyssinian crisis, a fresh impetus was given to the investment markets by the disclosure in the monthly return of the clearing banks that there had been another great rise' in the total of banking Deposits to the record figure of £2,019,000,000. I am inclined to doubt, however, whether this rise should necessarily be regarded as representing a huge addition to funds available for investment. The increase was largely
due to a great expansion the discount activities of the banks, a large increase being shown in the portfolio of Bills. In so far as the increased holding of Deposits raises the pro- portion of resources which the banks are able 'to employ in loans or securities, the advance is, perhaps, an argument in favour of further investment-buying on the part of the banks, but the position is rather different from that which arises when the growth in banking Deposits is directly due to an increase in savings on the part of the community.
Previous page
