EUFA
(exposing UnacceptableFinancail Activities)
www.eufa.co.nz

Media Statement

The support group Exposing Unacceptable Financial Activities (EUFA) struggling to achieve accountability for victims of the Finance Industry crash is concerned at the purpose of the Reserve Bank’s public Statements about the current safety of the foreign owned Banks.

The Reserve Bank statement on the situation of foreign owned banks registered in New Zealand appears to be an effort to disguise the fact that prudential supervision regulations of Banks in New Zealand are substantially weaker than regulations in Australia.

Given the global effect of the credit crisis there is nothing to suggest the foreign owners of New Zealand Banks will not take advantage of the weaker regulations if the credit crunch puts direct pressure on the parent Bank.

If the Reserve Bank had effectively enforced it’s full statutory powers over the Finance Industry, over recent years many thousand investors who have lost their savings would have been pre-warned of the true risks their money was being exposed to.

Most would have not invested.

For several years the authorities have been concerned about the actions of finance companies, but they have neglected to ensure the public were advised of the true position.

The Reserve Banks own reports to Government support this fact.

At a meeting with senior Reserve Bank officials in March, EUFA finance spokesman Gray Eatwell directly challenged the Reserve Bank over the abdication of its duty. In particular Mr. Eatwell questioned the failure to take adequate measures to warn the public of the Bank’s observations of the inappropriate financial practices several finance companies and those rating them were engaged in.

When we review the direct impact poor governance has had on New Zealanders losing the use of $5.7 Billion of their savings, the public would do well to question the motives of the Reserve Banks latest spin on the safety of foreign owned Banks.

Consistent with many public warnings made by the Bank workers union FINSEC, EUFA warns people to be aware that when they invest their savings through their Bank, that the Bank may not necessarily guarantee their investment.

ENDS

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