Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Federated Farmers awaits examination of swaps


27 February 2013

Federated Farmers awaits Commerce Commission examination of swaps

Federated Farmers has asked the Commerce Commission to look into the selling of debt finance instruments known as ‘swaps’. This formal request was made last November.

“It is fair to say we have received a number of inquiries from members and even non-members regarding swaps,” says Bruce Wills, Federated Farmers President.

“As most of these instruments were sold to farmers between 2007 and 2009, the impact of the global financial crisis upon interest rates saw concerns really only arise after 2009.

“While personal responsibility means poor decision making is no defence, Federated Farmers will not excuse the wilful misselling of any product; financial or otherwise. This explains why we asked the Commerce Commission last November to look into swaps and how they were sold.

“Speaking as a former banker swaps are incredibly complicated instruments. You certainly only go into them after independent advice to ensure they are appropriate to your needs.

“I think the issue is less the product but the way they were sold.

“Most farmers do not use swaps and the product is still being sold right across the commercial spectrum. We have to be careful not to throw the baby out with the bathwater because I receive calls from farmers who rate swaps highly.

“Federated Farmers believes legitimate concerns need to be resolved. If there is fire where there is smoke the Commerce Commission is best placed to find it.

“It is also worth remembering what we told the Labour-led Opposition banking Inquiry in August 2009; “We have also received reports from our members that margins have been changed on fixed term swap rates and that loan contract clauses might have been changed last year to enable this to happen. There appears to be considerable confusion about ‘swaps’, with them being sold to farmers as though they are fixed rate products: one of our survey respondents wrote “they have mentioned they can change the margin on our swap which wasn’t mentioned when we signed up. It was sold to us more like a fixed loan”.

“In December 2010, in our submission to the Review of the Code of Banking Practice, we further said; “A number of farmers have expressed concern to us about confusion over products such as swaps. Many farmers (and even their advisors) misunderstood swaps and were unable to take advantage of lower interest rates from late 2008 without paying excessively high break fees”.

“Federated Farmers has close contact with all the major lenders and the New Zealand Bankers Association. We are assured issues with swaps are being worked through on an individual basis.

“We also hope the Commerce Commission will be able to examine them too. It is best placed to bring clarity to what has become a controversial financial instrument,” Mr Wills concluded.

You can view Federated Farmers letter to the Commerce Commission here.
ends

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

BusinessDesk: SkyCity Lifts Minimum Convention Centre Investment To $430M

SkyCity Entertainment Group, the casino operator, has lifted the minimum it will invest in the Auckland International Convention Centre to $430 million and said total costs including land may be $450 million to $470 million. More>>

Statistics: Drop In Dairy Prices Leads Fall In Exports

Total goods exports fell $240 million (5.5 percent) to $4.2 billion in April 2015 compared with April 2014, Statistics New Zealand said today. More>>

BusinessDesk: APN's NZME Sees Future In Paywalls, Growth In Digital Sales

APN News & Media has touted a single newsroom concept for its NZME unit in New Zealand, similar to what Germany's Die Welt uses, saying an 'integrated sales proposition' is helping it win market share, including ... More>>

Labour Party: Global Milk Prices Now Lowest In 6 Years

The latest fall in the global dairy price has brought it to the lowest level in six years and shows there must be meaningful action in tomorrow’s Budget to diversify the economy, says Labour’s Finance spokesperson Grant Robertson. “Dairy prices ... More>>

BusinessDesk: NZ Inflation Expectations Creep Higher In June Survey

May 19 (BusinessDesk) - New Zealand businesses lifted their expectations for inflation over the next two years, sapping any immediate pressure on the Reserve Bank to cut interest rates, and prompting the kiwi dollar to jump higher. More>>

BusinessDesk: Lower Fuel Costs Drive Down NZ Producer Input, Output Prices

May 19 - Producer input and output prices fell in the first quarter, mainly reflecting lower fuel costs and weakness in prices of meat and dairy products. More>>


Media: Fairfax Media NZ Announces Senior Editorial Team

Fairfax Media New Zealand has today confirmed its new editorial leadership team, as part of a transformation of its newsrooms aimed at enhancing local and national journalism across digital and print. More>>

Science: Flavonoids Reduce Cold And Cough Risk

Flavonoids reduce cold and cough risk Research from the University of Auckland shows eating flavonoids – found in green tea, apples, blueberries, cocoa, red wine and onions – can significantly reduce the risk of catching colds and coughs. The research, ... More>>

BusinessDesk: RBNZ House Alert Speech The Catalyst For Government Action

Prime Minister John Key all but conceded that pressure from the Reserve Bank of New Zealand for concerted action on rampant Auckland house prices was one of the main catalysts for the government's weekend announcements about tightly ... More>>

BusinessDesk: How To Fall Foul Of The New Housing Tax Rules: Tips From IRD

Just because you rented out your investment property doesn't absolve you from paying tax, says the Inland Revenue Department in a summary of commonly made mistakes by non-professional property investors when it comes to their tax liability.More>>

Legal: Superdiversity Law, Policy And Business Stocktake Announced

Mai Chen, Managing Partner at Chen Palmer New Zealand Public and Employment Law Specialists and Adjunct Professor of Law at the University of Auckland, today announced the establishment ... More>>

Housing: More House Price Gains Expected

House price expectations remain high, with a net 56% of respondents expecting house prices will increase. Fears of higher interest rates are fading, consistent with the RBNZ’s signals this year. Affordability and a lack of houses for ... More>>

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news