Gareth Morgan lines up finance sector in latest book

By Paul McBeth

Monday 22nd June 2009

Gareth Morgan, the economist and KiwiSaver fund manager, lashed out at the financial sector in the wake of the global credit crisis last year in the release of his latest book, After the Panic: Surviving bad investments and bad advice.

His new book, lays out the causes of the collapse in New Zealand's finance sector, and Morgan hopes the country will avoid a repeat of ignorant investing that allowed "shonky" operators to prosper. It also covers the triggers of the global recession and the role central banks had in allowing commercial banks to act irresponsibly.

"The whole sector to me has got this high level of incompetence," he said in a statement. "It was irresponsible central banks allowing their commercial banks to forget credential ratios" that stoked the global slump, he said.

Morgan has been a vocal critic of finance industry and he raised hackles earlier last month when he said the poor New Zealand score in an international survey of managed funds was deserved, calling their performances "lousy".

He's critical of the excess credit that's been available internationally for the last 20 years, and said the requirement for a 20% deposit on a house is something younger generations will have to learn to deal with.

The book will also name directors "hiding behind limited liability companies" that Morgan thinks the public should keep track of.

"Although there's been a lot of stuff swirling around in the media with names being mentioned here and there I suspect people were so overwhelmed with the unrelenting bad news that they ended up switching off," he said.

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