Bank Guarantee Scheme Coming Sooner
October 24, 2008 New Zealand Finance
The government’s proposed bank deposit guarantee scheme is planned to be instituted before the November 8th election.
While previous government statements placed the timeline for the scheme as being before Christmas Day. This announcement seems to be a warning or an indication of intent so far, as there were a number of details omitted by Michael Cullen concerning the Bank Deposit Scheme. Predominantly the missing details are those surrounding the involvement and requirements from the Australian government and banks in regards. However, previous statements made by Michael Cullen indicate that there might be a requirement for participating Australian banks to float set amounts of their shares on the New Zealand Stock Exchange.
This quickening of pace is not thoroughly welcome by some key banking figures. ANZ National’s chief executive Graham Hodges, maintained throughout statements made that there is no need to “rush” into the bank guarantee scheme. He also said that the New Zealand market is at a comfortable level of liquidity at the moment, one which did not require immediate action.
Michael Cullen claimed that the New Zealand government has been considering actions such as this scheme for a long time, and would have preferred to announce them at a later point but because of Australia announcing an equivalent scheme, it had to be done now.