“..Bank guarantee scheme will end in April, says English..”
“..The Government’s wholesale funding guarantee, introduced during the 2008 global banking crisis, will be shut down at the end of next month, says Finance Minister Bill English.
The wholesale funding facility was set up in November 2008 when the liquidity crisis hit global credit markets.
Speaking at a meeting in Auckland today, English said the scheme had helped the banks access funding during the crisis, but international conditions had now improved.
“New Zealand banks are now raising funds without using the guarantee, which was always envisaged as a temporary measure for extraordinary times,” he said.
Today’s announcement follows confirmation last month that the Australian wholesale funding guarantee will end on March 31.
Other countries have also ended their guarantee schemes .. or are in the process of doing so.
English said the wholesale guarantee facility was separate from the retail deposit guarantee scheme.
No changes are planned for the retail deposit scheme beyond those announced last year, which take effect from 13 October 2010.
Since the wholesale guarantee was set up, 24 guarantee certificates have been issued, covering $10.3 billion of borrowing by banks.
The scheme has made no payouts and the Government will receive almost $290 million in fees..”
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