ABSTRACT
The most obvious defect lies in undermining the powers of the note-issuing institution. With the absence of a local discount market, the dependence of the credit situation on foreign money markets is almost inevitable. The developments in connection with the public debt case have helped to discredit the currency system. As the Egyptian pound, through no obvious fault of Egypt’s, followed sterling, the foreign creditors of that country demanded payment of debt coupons in gold. The chapter deals with the nature and problems of reforming the credit organisation so as to ensure ample facilities for general development. It examines the possibilities of a scheme for co-ordinating and controlling the differing policies of the various credit agencies. The most obvious course of reform is to set up a central bank, to entrust it with such powers and to charge it with such functions as are likely to reduce, if not to eliminate, the defects of the existing regime.
