If banks have chosen to restrict lending, it is therefore largely because of the economic downturn; admittedly, “pure” supply-side elements which constrain banks and thereby leave them no choice but to decrease lending volumes also played a role, but a much smaller one than is commonly believed.
Exchange rates were fixed via parities to gold and the money supply was thus tied to gold reserves. Therefore, any balance of payments disequilibria would trigger changes in  BIS central bankers’ speeches  1  monetary conditions and thus external balance was easily restored through the adjustment of prices and production.