Good news was released this week, we, the taxpayers, creamed almost $300 million out of financial institutions during the recently-forgotten global financial crisis (GFC).
In a release announcing the end of the government guarantee for wholesale funds, Finance Minister Bill English let slip that the GFC was actually a huge revenue-generating opportunity for the New Zealand government.
“Since the wholesale guarantee was set up, 24 guarantee certificates have been issued, covering $10.3 billion of borrowing by banks. The scheme has made no payouts and the Government will receive almost $290 million in fees,” the release revealed.
So, given it’s been such a great money-spinner you’d have to ask why the government getting out of the guarantee business – the profit margins look fabulous.
Well, as English put it, the guarantee was merely a “temporary measure for extraordinary times”.
From now on, it’s back to ordinary time, for large financial institutions only, however.
Retail deposits, or some of them remain under guarantee until late next year. The retail scheme has also not been cost free with the government bailing out investors in two finance companies so far, Strata and Mascot.
So normality hasn’t quite resumed, as a reading of the latest Reserve Bank monetary policy statement reveals.
Introducing the reams of data and pages of analysis, Reserve Bank governor Alan Bollard appears ‘cautiously optimistic’ that NZ, along with the rest of the world, has just about shaken that nasty global financial crisis.
“At the same time, risks around the global outlook have increased, although not to the extreme levels seen at the height of the crisis,” Bollard says.
The implication is that the recovery party will be a subdued affair for most of us – not for these guys, though.
“The number of billionaires has soared in the past year, and dozens of people who lost that elite status in the credit crisis have won it
back as stock markets and commodities prices have rebounded,” the story notes.
Tags: David Chaplin