New Zealand finance minister says no sign of risk to banks
13/10/2008 16:59
New Zealand Finance Minister Michael Cullen said today that there is no
evidence of any risk to New Zealand's banking institutions -- nor is there any
anticipated.
The New Zealand government yesterday moved to guarantee all bank
deposits for two years, for banks which opt into the scheme.
Cullen said he
acted following public concern about the stability of the country's banking
sector.
He saids New Zealand was in the uncomfortable position of being the
only Western country not offering any guarantee on deposits.
Australia has
guaranteed deposits in banks, building societies and finance companies for the
next three years.
If all banks take up the scheme, Cullen said it will leave
the government with a contingent liability of about 150 billion NZ dollars
(US$90 billion).
The opposition National Party welcomed the announcement,
saying it expected the government to set up a bipartisan process to work through
the details.
The New Zealand Stock Exchange said events overseas have forced
the government to announce it will guarantee financial deposits.
Cullen said
the deposit guarantee will be introduced for a two year term in the first
instance, which will give time to see how well international financial markets
stabilise in the months ahead.
Xinhua
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