A couple of weeks ago, when a banker was calling for the Central Bank to give the banks control over savings interest rates I wrote that the Central Bank should not relinquish such control.
The banks' survival depends on the people of a country, and if the people do not save, then the banks cannot exist.
Therefore there must be a symbiosis among the players. And banks often forget this.
Savers must be treated to a fair return for their money which the banks use in order to bring profit to their shareholders. And banks often forget this.
I remember Dr Blackman looking at me and asking: "How much are you paying for savings?" I said: "Five per cent." His reply to the bankers who were seeking a lowering of savings rate was: "And he is the youngest among you."
What Dr Marion Williams may not have in her hands is an "amicus curiae" who understands his role in society. She must stand firmly in control of the savings interest rate.
The fervent call for people to borrow now that they are finding it difficult to make ends meet has been occasioned by the banks' surplus of funds.
They live in a society, and when that society is experiencing good times they should experience good times too. But when the society has to tighten its belt, they should tighten their belts also, experience smaller profits and drop their interest rates on loans.
Oh, why did we sell our National Bank!
If a business is going through hard times: drop in sales or higher market prices or drop in supplies, one way of helping that business is to lower its cost of funds. Admittedly the banks should see a correspondent lowering of their cost of funds.
But they cannot have it both ways. They cannot maintain their loan rate so they can make more profit and expect the Central Bank to give them "carte blanche" over savings interest rates.
I agree with the Central Bank.
Now who will bell the cat?
Or is there a cabal?
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