- #1711115Hero42MemberMember since: July 18, 2008
Replies: 11575Hero42 February 12, 2019 at 1:56 pm
New Zealand briefly had a government guarantee for retail bank deposits from October 2008 to December 2011. It was introduced at the worst point in the Global Financial Crisis to stop a run of deposits across the Tasman to the banks’ parents in Australia, where the Kevin Rudd Government offered a guarantee for depositors there.
It was quietly dropped once global markets had settled down and was replaced by a system called ‘Open Bank Resolution’. This means there is no Government guarantee and if a bank was to fail, the Reserve Bank would shut it down and manage a capital restructure overnight so that it could re-open the next day. One way a bank’s capital could be restructured by the Reserve Bank is through a ‘hair-cut’ for depositors. Essentially, the Reserve Bank would slice a certain percentage – say 10% – off the value of term deposits to allow the bank to re-open with enough capital to survive.
Cheers 🙂#1711133paulinemMemberMember since: July 8, 2006
Replies: 782paulinem February 12, 2019 at 4:17 pm
Halycon we have NEVER had a social credit economy, Keynesian yes which I admit is similar to SC . Cracknell was only one member of parliament, how can you say he was responsible for the banking problems !
I strongly suggest you reread the post I put up yesterday which was written in the NZ Herald by an expert in economic banking management. As he correctly pointed out Austral an banks like ANZ ASB Westpac etc do not risk their investors savings to lend out they CREATE the money they lend. But these banks then expect the loans to be paid back in real hard earned monies. This is the reason they have been making obscene profits. This is the reason that our housing market has become obscenely over valued. Its the reason our rents are obscenely high as speculators with good capital reserves are the only ones that can afford to buy the overvalued homes. Then the speculators use this to make an economic killing by overcharging the rents of these homes they then rent out .#1711203jensMemberMember since: May 3, 2006
Replies: 7553jens February 13, 2019 at 10:13 am
All credits (Keynesian, “Social”, bank, and private) become just donations or procurement if not repaid, and even paulinem will have to admit that there are limits to what can be donated or just taken.
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