Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search

 


National planning Cyprus-style solution for New Zealand

19 March 2013

National planning Cyprus-style solution for New Zealand


The National Government are pushing a Cyprus-style solution to bank failure in New Zealand which will see small depositors lose some of their savings to fund big bank bailouts, the Green Party said today.

Open Bank Resolution (OBR) is Finance Minister Bill English’s favoured option dealing with a major bank failure. If a bank fails under OBR, all depositors will have their savings reduced overnight to fund the bank’s bail out.

“Bill English is proposing a Cyprus-style solution for managing bank failure here in New Zealand – a solution that will see small depositors lose some of their savings to fund big bank bailouts,” said Green Party Co-leader Dr Russel Norman.

“The Reserve Bank is in the final stages of implementing a system of managing bank failure called Open Bank Resolution. The scheme will put all bank depositors on the hook for bailing out their bank.

“Depositors will overnight have their savings shaved by the amount needed to keep the bank afloat.

“While the details are still to be finalised, nearly all depositors will see their savings reduced by the same proportions.

“Bill English is wrong to assume everyday people are able to judge the soundness of their bank. Not even sophisticated investors like Merrill Lynch saw the global financial crisis coming.

“If he insists on pushing through this unfair scheme, small depositors can be protected ahead of time with a notified savings threshold below which their savings will be safe from any interference.”

Dr Norman questioned the Government’s insistence on pursuing Open Bank Resolution when virtually no other OECD country uses it.

“Open Bank Resolution is unprecedented in the world. Most OECD countries run deposit insurance schemes which protect people’s deposits up to a maximum ranging from $100,000 – $250,000,” Dr Norman said.

“OBR is not in line with Australia, which protects bank deposits up to $250,000.

“A deposit insurance scheme is a much simpler, well-tested alternative to Open Bank Resolution. It rewards safe banks with lower premiums and limits the cost to taxpayers of a bank failure.

“Deposit insurance will, however, require the Reserve Bank to oversee and regulate our banks more closely – a measure which is ultimately the best protection against bank failure.”



© Scoop Media

 
 
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

 

Gordon Campbell: On The IOC’s Treatment Of Russian Sport, And Lone Wolf Terrorism

A blanket ban on Russian athletes would also have exposed the IOC to criticism that its treatment of Russia would have been marked contrast to its treatment say, of the track and field team from Kenya – a country about which the IOC has very similar doping concerns. More>>

ALSO:

Sounds Like A Plan: Auckland Council Receives Unitary Plan Recommendations

A key milestone in New Zealand planning history was reached today when the Independent Hearings Panel delivered the reports containing its recommendations on the Proposed Auckland Unitary Plan. More>>

ALSO:

National Park Expansion: Forests And Coast Of Kahurangi Protected

Five parcels of high value land totalling more than 890 hectares have been formally gazetted as part of the National Park. More>>

ALSO:

PPP Go-Ahead: SkyPath Gets Unanimous Support

Auckland’s SkyPath project has been given the go-ahead to be delivered through a public private partnership, after a unanimous decision at today’s Finance and Performance Committee. More>>

ALSO:

Gordon Campbell: On The Reserve Bank, The UN Shortlist, And Trump

Can there really be there any link between the US presidential elections and yesterday’s RBNZ signals on interest rates and the NZ dollar? Well, maybe. And it would be this: the improving US economy is reportedly putting a tailwind behind the US dollar, and rendering the actions of our Reserve Bank virtually irrelevant. More>>

ALSO:

Gordon Campbell: On What John Key Should Be Asking Joe Biden

No doubt, US Vice-President Joe Biden will be updating Prime Minister John Key on the chances of a TPP vote taking place in the ‘ lame duck’ session of Congress that’s held between the November’s election and the inauguration of a new President in January. More>>

ALSO:

Make NZ Make Again: Greens Will Establish A Minister For Manufacturing

The Green Party announced today that it will establish a Minister for Manufacturing in Cabinet, to better represent the interests of manufacturers and ensure they thrive. The Minister will be inside Cabinet and have responsibility for the long-term interests of the manufacturing sector. More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
 
Parliament
Search Scoop  
 
 
Powered by Vodafone
NZ independent news