Banks are now raising wholesale funding on their own after the Government’s wholesale guarantee facility was officially closed today.

The wholesale facility was set up in November 2008 to help banks access funding during the liquidity crisis, affecting global financial markets.

Today, Treasury said international market conditions have improved and New Zealand banks are now raising wholesale funding without using the guarantee, which was always created as a temporary measure for “extraordinary” times.

Since the facility was set up, 24 guarantee certificates have been issued, covering $10.3 billion of wholesale borrowing by banks.

To date, no claims have been made against the Wholesale Guarantee Facility and the Treasury considered the likelihood of future claims to be remote as the existing guaranteed issues roll through to maturity.

Closure of the facility does not affect the separate current or extended retail deposit guarantee schemes, which continue to operate.

Currently, deposits totalling approximately $133 billion with 73 financial institutions are guaranteed until October 12, 2010. The extended scheme covers deposits in approved companies for the period from October 12 until December 31, 2011.