Sharechat Logo

NZ govt tightens rules on guarantees for non-bank lenders

Wednesday 15th October 2008

Text too small?

New Zealand's government tightened rules on how deposit guarantees will apply to finance companies, curbing their ability to strip out funds and giving the state more power to probe their operations.

The release today from the Treasury and the Reserve Bank comes after media reports that the scheme, announced by Finance Minister Michael Cullen on Oct. 12, could be open to abuse.

In a joint statement Governor Alan Bollard and acting Treasury head Peter Bushnell said “a number of policy issues are arising that are being addressed” as the scheme is put into place.

Companies rated below BB or unrated would be charged a fee to belong to the scheme, based on the cumulative growth in the book since Oct. 12. New entrants are required to have at least a BBB- rating: investment grade.

Those that join the scheme will have to agree to additional reporting requirements and submit to government appointed inspectors.

A fee of 300 basis points per annum will be charged monthly to finance companies that are rated below BB or are unrated.

By Jonathan Underhill



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

EROAD Limited (NZX: ERD) launches Clarity Solo Dashcam
22nd October 2021 Morning Report
Pictor ready to roll out game-changing COVID antibody test in New Zealand
Scott Technology Limited (NZX: SCT) Announces FY21 Results
21st October 2021 Morning Report
Greenfern Industries Limited (NZX: GFI) L&Q Notice
TruScreen Group Limited (NZX: TRU) Clinical Trial Results Highlight Efficacy of TRU Technology
20th October 2021 Morning Report
Freightways Limited (NZX: FRE) Acquisition of ProducePronto
19th October 2021 Morning Report