Glass says suggestions to the Ministry of Economic Development that finance companies should be required to get a credit rating from one of the international ratings agencies such as Standard and Poor's, Moody’s or Fitch has got nowhere.
“They don’t’ want to know. They believe there’s a moral hazard involved. I don’t understand that argument.”
Glass says that after pressure from within and outside the industry “the equity market has largely cleaned up its act.
"But the area which keeps me awake at night is the finance companies. I‘m not confident we are going to see any action on this from the ministry. And it’s not the professional investors who are going to get hurt, it’s the mums and dads, who we’re supposed to be trying to encourage to save and invest more.”
Glass points out the value of the bad debts cited by Provincial - between $80-100 million – was more than the official number for the entire finance company sector quoted in the only comprehensive survey of the finance sector, KPMG’s annual survey.
“We can only imagine what the rest of the bad debt for the sector is.”
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