ABSTRACT
The credit market has, in varying degree, been short of funds ever since the end of the Second World War, and the cheap money policy pursued until about 1955 probably accentuated the shortage. Government borrowing showed a marked upward trend, as did finance for house building. A large proportion of Government borrowing could not be covered by the capital market, but took place through the Riksbank and the commercial banks. Measures to promote savings do not satisfy the requirement of providing scope for increasing exports and more investment through temporary increases in savings and reductions in consumption. Competition for the available credit must be very great in a full employment society in which the resources of production are severely strained, and credit rationing is therefore likely to preserve the existing structure of the economy to a greater extent than would otherwise be the case.
