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


Banks still big overseas borrowers

Council of Trade Unions media release
22 December 2010

Banks still big overseas borrowers, government still has net overseas assets

Council of Trade Unions Economist Bill Rosenberg commented on the balance of payments figures released today:

“While the balance of payments shows a welcome small improvement with the current account deficit reducing even after taking account of the Canterbury Earthquake, two facts are important to keep in mind.

“First, the government still has $2.7 billion more overseas assets than liabilities. Much of its borrowing has been from New Zealand residents. Although government net debt has risen by about $11 billion since pre-crisis times in 2007, its net overseas position has deteriorated by only about $6 billion in the same period. New Zealand’s net liabilities are still owed privately, mainly by banks.

“Second, despite new Reserve Bank rules, banks still owe 60 percent of the gross debt ($150.1 billion). The Reserve Bank has forced them to borrow at longer terms to reduce the huge vulnerability shown in the Global Financial Crisis, but they are still borrowing heavily abroad to finance mortgages and other lending in New Zealand. That means difficulty for the Reserve Bank to control money supply in the future, and the risk that we will get another overseas debt-fuelled housing price bubble.

“The improvement in the balance of payments is largely due to lower overseas company profits, when the effects of the earthquake are removed. That will turn around, and the position is starting to turn, with the current account deficit beginning to rise again as a percentage of GDP.”


© Scoop Media

Business Headlines | Sci-Tech Headlines


Government: Delivering Lower Card Fees To Business

Commerce and Consumer Affairs Minister David Clark has today announced the Government’s next steps to reduce merchant service fees, that banks charge businesses when customers use a credit or debit card to pay, which is estimated to save New Zealand businesses ... More>>

SEEK NZ Employment Report: April 2021

OVERVIEW OF APRIL 2021: STATE OF THE NATION: April, for the second consecutive month, saw the highest number of jobs ever advertised on Applications per job ad fell 9% month-on-month (m/m). SEEK job ads were up by 12% m/m. SEEK job ads were ... More>>

Commerce Commission: Warns Genesis Over Business Billing Errors

The Commerce Commission has issued a warning to Genesis Energy Limited about billing errors concerning electricity line charges to business customers. Genesis reported the errors to the Commission. The Commission considers that Genesis is likely to ... More>>

Stats: Lower Job Security Linked To Lower Life Satisfaction

People who feel their employment is insecure are more likely than other employed people to rate their overall life satisfaction poorly, Stats NZ said today. New survey data from the March 2021 quarter shows that 26 percent of employed people who thought ... More>>

The Conversation: The Outlook For Coral Reefs Remains Grim Unless We Cut Emissions Fast — New Research

A study of 183 coral reefs worldwide quantified the impacts of ocean warming and acidification on reef growth rates. Even under the lowest emissions scenarios, the future of reefs is not bright. More>>

The Conversation: Why Now Would Be A Good Time For The Reserve Bank Of New Zealand To Publish Stress Test Results For Individual Banks

Set against the backdrop of an economy healing from 2020’s annus horribilis , this week’s Financial Stability Report (FSR) from the Reserve Bank (RBNZ) was cautiously reassuring: the country’s financial system is sound, though vulnerabilities remain. More>>