1.   They may simply go ahead and expand credit, and accept a lower liquidity ratio.

2.   If banks choose to hold a lower liquidity ratio, they will have surplus liquidity.

3.   The banks have tended to choose a lower liquidity ratio over the years, and certainly a lower cash ratio.

4.   In the medium and long term, the major sources of monetary growth are banks choosing to operate with a lower liquidity ratio and government borrowing.

5.   Banks choosing to operate with a lower liquidity ratio could be prevented by the authorities imposing statutory reserve requirements on banks.

6.   Banks, being prepared to operate with a lower liquidity ratio, were only too pleased to supply the credit being demanded.