New Zealand viewed as relative safe haven

By Paul McBeth

Friday 13th February 2009

New Zealand is being viewed as a relative safe haven, and foreign lenders are likely to restore credit lines to the nation's banks, the central bank governor said today, according to Reuters.

Reserve Bank Governor Alan Bollard has returned to New Zealand after visiting Hong Kong, New York, and London in a bid to encourage fund managers to offer term loans to New Zealand's banks. While the managers remain very cautious, the government's bank guarantee has been compared favourably to those in the US and Australia, a separate Bloomberg report said.

"Markets are seeing this as a safe place to focus their activity [with] this government guarantee, good governance, and good banking system," Bollard said to reporters in Wellington. "There is no appetite for anything other than pretty vanilla, straight-forward stuff with very clear guarantees around it."

New Zealand last year agreed to guarantee wholesale lending to help renew credit lines to international markets. Local banks had been passing on the central bank's rate cuts to borrowers, and had not closed access to new lending, Bollard said.

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