Banking Regulation
February 26th, 2005 at 11:27 am by David FarrarThe Dominion Post reports that Dr Cullen ignored the advice of all his top officials when he caved in to an Australian push for a single banking regulator.
Now to be fair to Dr Cullen, National’s John Key is on record as saying he supports a single regulator.
Now Mr Key probably knows more about banking than I know about anything, so that gives me some reassurance.
However I wonder if both men are over-looking the well documented history of Australian Governments doing over New Zealand, if it is in their interest. Remember single trans-tasman airline policy?
If an Australian bank gets into trouble, I am damn sure New Zealand customers will be well down the list of people to look after. Somewhere after paying the pet store for the food for Millie, the bank’s pet cat.
No tag for this post.
February 26th, 2005 at 11:43 am
I agree with you David but, on the other hand, the bloody Australians own them all anyway so what’s the dif? Perhaps they should be allowed to regulate the NZ operations of Australian owned banks only. Then everybody might be happy. (Hang on Adolf, that means Kiwibank gets let off the hook!)
Vote:February 26th, 2005 at 1:48 pm
The real issue is the use of ‘structured finance’ deals to avoid paying any NZ tax at all. It only happens when you have the head office in another country so that a dividend becomes an interest payment. Tax laws have been changed to try to stem this practice but once you aren
Vote:February 26th, 2005 at 1:49 pm
Considering the Aussies own 85% of New Zealand banking if an Aussie bank gets into trouble then NZ will be affected despite the best efforts of the New Zeland regulator. Do you really think the RBNZ can really regulate safety for NZ cuctmers and ring-fence us away from trouble in Australia?? Looks like a power play from the RBNZ which has no real role in banking regulation. Next step is a common currency which in practice means the Aussie dollar.
Vote:February 26th, 2005 at 5:55 pm
A common currency between NZ and Oz would mean a big loss in business for all banks- plus that would take a big slice of economic policy out of the hands of the Wellington elite. Wont happen in a million years that one.
Vote:ps would you be the one to take 10 -15% off the value of NZ bank accounts to convert to Aussie dollars. LOL ,actually ‘die laughing’
February 27th, 2005 at 2:59 pm
I am not happy with Cullen’s comments but that is not what I would yet call an informed response. I look forward to talking with him about this.
I share your concerns, DPF, and would not want to see any part of our economy being under Australian regulation.
Vote:February 28th, 2005 at 12:25 am
Aussie banks are the parents for most Kiwi banks. I reckon that parents should take care of their children without gasping to adopt policy. The thing is the capital allocated to Kiwi subsidiaries need to be reduced. If Fonterra can grap capital from most Kiwi farmers, why don’t Kiwi banks just grap capital from most Kiwi depositors, investors and lead steers, including the farmers and other business entities? Would it be a clearer goal for most Kiwi subsidiaries to take off on such form of a cooperative group of banks in the future?
Vote: