RBNZ’s liquidity measures no problem for SCF: Maier
South Canterbury Finance chief executive Sandy Maier doubts the central bank's proposed liquidity controls for non-bank deposit takers (NBDTs) would be a problem for the company.
Tuesday, February 16th 2010, 11:12PM
South Canterbury Finance chief executive Sandy Maier doubts the central bank's proposed liquidity controls for non-bank deposit takers (NBDTs) would be a problem for the company.
Though SCF flagged a billion dollar hole in its books coming due in the next eight months as a liquidity risk in its recent investment statement, Maier, who supports the idea of liquidity policies, said any regulation would be gradually phased in and would not have a material impact on the immediate business.
Any new regulations would be phased it," Maier told depositrates.co.nz. "Our liquidity policy is integral to running the business, and we're aware of that very thing."
The central bank has called for submissions on whether NBDTs should face similar liquidity requirements as banks with a view to offer a recommendation to Cabinet in the second quarter. The Reserve Bank's early view is that borrowers should face liquidity requirements to hinder arbitrage, though it accepts NBDTs rely on retail deposits more heavily than banks.
Maier is comfortable with the looming prudential regulations facing NBDTs, including the prospect of requiring 8% capital ratio requirement for tier one capital, saying South Canterbury Finance's recapitalisation plan will ensure that it meets all of the new criteria, though he is coy about giving any details about what and when an announcement will be made.
"As soon as I know, you'll know," he said.
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