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Thread: RBNZ Keeps Telling People They're Safe?

  1. #1
    ExPat is offline Member
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    Default RBNZ Keeps Telling People They're Safe?

    When someone keeps telling you everything is ok, then I think it's time to start wondering if they're really ok....




    NEWS RELEASE
    Date 21 August 2008
    Time 9:30am

    NZ financial system sound, functioning well - RBNZ

    The New Zealand financial system is fundamentally sound and continues to
    function well, despite recent headlines of financial stresses, Reserve
    Bank Head of Prudential Supervision, Toby Fiennes, said today.

    Speaking to an Auckland business audience, Mr Fiennes said investors
    have been hurt and others unsettled by recent failures of local
    financial firms, frozen mortgage trust funds, and potential bad debt
    provisions by international banks.

    "I can assure you we are well aware of the cost for people who have been
    unfortunately caught up in the fallout," he said. "But it is important
    to keep a sense of perspective.

    "The majority of institutions, accounting for over 90 percent of
    household financial assets, are not directly affected by these current
    events. These institutions are well capitalised businesses and give no
    apparent reason for concern."

    Mr Fiennes said many of the failures arose from a downturn in the
    property development sector. The main casualties have been the property
    lending finance companies, where investors have been exposed to
    significant risks in exchange for a relatively small margin over bank
    deposit rates.

    The international credit crunch has also meant that funding for
    financial institutions is harder and more expensive to access,
    exacerbating the pressures.

    "Our banks are navigating their way through the current turmoil well.
    Capital positions are well above the minimum levels required by
    regulation. Credit ratings remain strong. And loss provisioning is not
    abnormal for this point in the cycle.

    "We are monitoring the situation closely and are in regular contact with
    key players, including other regulatory authorities."

    Mr Fiennes said that, purely as a precautionary measure, the Bank has
    put in place a facility where it will accept Residential Mortgage-Backed
    Securities as collateral for cash, giving institutions an additional
    funding avenue.

    "This facility, like those used by other central banks, has been
    designed in case the global credit markets deteriorate further and make
    cash difficult to access, but the likelihood of this being needed
    remains extremely low," he said.

    Media contact:
    Mike Hannah
    Head of Communications
    Ph 04 4713671, 021 497418, mike.hannah@rbnz.govt.nz

  2. #2
    Dawn's Avatar
    Dawn is offline All Knowing Deity
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    An up-lifting post from Ex-Pat as ever

    There's something in what he says though. We have Kiwi friends who run a financial, credit, investment opportunity thingy, with interests in property, commerical, business and the like and they reckon the economy here is the worst it's been in 20 years! They say financial institutions are quaking in their boots. Now I don't understand it all, nor do I want to coz I don't want my many hued thoughts blackening with dirty talk of money and finance but we are completely unsure as to what to do with what little cash we have left just now. Do we invest in a property and risk a mortgage or do we continue to rent until things level out?

    One good thing though, if my business is working well just now when no one's got any extra cash for niceties, it should pick up well once things settle down
    Passionate about the unfathomableness opportunities of kiwi-a-gogo-land

  3. #3
    ExPat is offline Member
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    Quote Originally Posted by Dawn View Post
    An up-lifting post from Ex-Pat as ever
    Just trying to keep you safe Dawn. We money Angels are tasked with such duties. At a minimum, I would keep money in TWO separate banks until this thing passes over, otherwise I'll end up buying all your property dirt cheap and we know where that will lead us.....


    Expat

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