English warns of local economic fallout from EU turmoil

New Zealand banks could suffer disruption if the EU financial crisis deepens, Finance Minister Bill English warned today.

“There is…the possibility that the financial markets in which the New Zealand Government and New Zealand banks borrow could be disrupted at times,” Mr English told the House.

The comments were in response to what was clearly a planted question from National backbencher, Maungakiekie MP Sam Lotu-Iiga.

A default by Greece – which economists are predicting as more likely day-by-day – would have a cascading effect.

“The resulting losses would affect the soundness of European banks and possibly send Europe back into recession. Europe still accounts for 13 percent of our merchandise exports, so any economic weakness in Europe is not good news for New Zealand.”

New Zealand banks are better funded, with more stable, longer-term deposits, than they had in 2008 and they are less dependent on the 90 Day “hot money”.

Uncertainty from the global financial conniptions – especially that of Europe –has already pushed up wholesale funding costs for New Zealand banks, as the National Business Review reported a month ago.

However the banks are less vulnerable than they were, Mr English said.

“There has been concerted action since the 2008 financial crisis to reduce New Zealand’s vulnerability to the financial markets in which we borrow. The Reserve Bank has ensured that our banks are in a sounder position now than they were then.”

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...and the chorus for "single currency salvation and we'll wipe all debt" chimes in...


People have to start waking up and understanding these crashes are engineered. If we comply with these problem-reaction-solution scenarios it would be our undoing.


While our banks operate ponzi style undertakings, they of course will be vulnerable


yet another convenient excuse to cover up govt's lack of a cohesive plan to move the economy forward?


Another excuse for the banks to charge a higher margin

We are still being charged the additional funding cost of the banks 4 years ago after the GFC which the banks have stopped paying two years ago. Why doesn't Bill English have the balls to tell the banks that they can't add another margin if greece fails and maybe also give some back to their customers

Harden up Bill and look after the whole economy - not just your mates


"No shit, Sherlock"


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