Top Scoops

Book Reviews | Gordon Campbell | Scoop News | Wellington Scoop | Community Scoop | Search


RBNZ to accept corporate debt as collateral

NZ central bank to accept corporate debt as collateral

Dec. 12 – The Reserve Bank of New Zealand has widened the range of securities it will accept as collateral for loans, including investment grade corporate bonds, bills and assert backed securities.

The move applies to securities denominated in New Zealand dollars and is expected to be a temporary measure while financial markets are unsettled.

“We are taking these steps to further enhance system liquidity and ease some of the current pressures on corporate sector funding,” Deputy Governor Grant Spencer said in a statement.

Each security would be considered on a case-by-case basis, Spencer said. The liquidity measures don’t mean the central bank will be lending direct to companies though they are likely to make corporate debt more liquid and therefore a more attractive investment prospect for banks and portfolio managers, he said.

The securities will include those guaranteed by the government, corporate securities rates at least BBB-, shorter-term securities rated A2, F2, P2 or better, and New Zealand dollar asset-backed securities rated AAA, A1+, F1+ or P1, according to the statement.

In October, the bank said it would temporarily accept residential mortgage-backed securities as collateral to improve liquidity in the banking system. The move mirrors action by the Australia's central bank, which yesterday relaxed restrictions on the use of securities for repurchase agreements, including RMBS.



© Scoop Media

Top Scoops Headlines


Philip Temple: Hang On A Minute, Mate
Peter Dunne quietly omits some salient facts when arguing for retention of MMP’s coat-tailing provision that allows a party to add list seats if it wins one electorate and achieves more than 1% or so of the party vote... More>>

Cheap Grace And Climate Change: Australia And COP26

It was not for everybody, but the shock advertising tactics of the Australian comedian Dan Ilic made an appropriate point. Australia’s Prime Minister Scott Morrison, a famed coal hugger, has vacillated about whether to even go to the climate conference in Glasgow. Having himself turned the country’s prime ministerial office into an extended advertising agency, Ilic was speaking his language... More>>

Binoy Kampmark: Funeral Rites For COVID Zero
It was such a noble public health dream, even if rather hazy to begin with. Run down SARS-CoV-2. Suppress it. Crush it. Or just “flatten the curve”, which could have meant versions of all the above. This created a climate of numerical sensitivity: a few case infections here, a few cases there, would warrant immediate, sharp lockdowns, stay-at-home orders, the closure of all non-vital service outlets... More>>

Dunne Speaks: Labour's High Water Mark
If I were still a member of the Labour Party I would be feeling a little concerned after this week’s Colmar Brunton public opinion poll. Not because the poll suggested Labour is going to lose office any time soon – it did not – nor because it showed other parties doing better – they are not... More>>

Our Man In Washington: Morrison’s Tour Of Deception

It was startling and even shocking. Away from the thrust and cut of domestic politics, not to mention noisy discord within his government’s ranks, Australian Prime Minister Scott Morrison could breathe a sign of relief. Perhaps no one would notice in Washington that Australia remains prehistoric in approaching climate change relative to its counterparts... More>>

Binoy Kampmark: Melbourne Quake: Shaken, Not Stirred

It began just after a news interview. Time: a quarter past nine. Morning of September 22, and yet to take a sip from the brewed Turkish coffee, its light thin surface foam inviting. The Australian city of Melbourne in its sixth lockdown, its residents fatigued and ravaged by regulations. Rising COVID-19 numbers, seemingly inexorable... More>>