NZ Herald on banking crisis

The Government continues to dither on whether to extend the depsit guarantee scheme to include wholesale borrowing. The NZ Herald Editorial notes:

Yet local banks must renew loans as they fall due if they are to have money to advance to businesses that need it to pay wages and bills. With the global financial system nervous and near frozen, it may be hard to raise the money when it is needed, particularly if other countries are underwriting their banks’ borrowings.

The simple reality is we are too small to not give the guarantee, when other countries have done so.

Many will have applauded the National Party leader’s offer to work with the Finance Minister in developing a response to the crisis. Not as many will have appreciated Michael Cullen’s refusal to do more than keep John Key and his finance spokesman, Bill English, briefed on progress.

Indeed.

But Dr Cullen’s position has to be recognised. To bring National into the decision-making would be almost an admission that it will be the next Government and neither major party in our system could be expected to make that concession before an election.

Or it could just be a realisation we are days out from a general election, and that regardless of the outcome, a bipartisan approach is prudent during this period.

National insiders claimed the bank governor, Alan Bollard, had wanted to brief the Opposition on the original decision in advance, but Mr Key did not make an issue of the Government’s refusal to do so. He shows a refreshing lack of interest in the petty side of politics and does not make too much of the advantage he could claim for his intimate knowledge of the finance industry.

A refreshing lack of interest in the petty side of politics. A strength some mistake for a weakness.