Kiwi banks ranked in top 25
New Zealand’s big four banks have been named among the top 20 safest in the world by Global Finance.
Friday, March 22nd 2013, 12:00PM
by Susan Edmunds
The ranking was created through an evaluation of long-term credit ratings—from Moody’s, Standard & Poor’s and Fitch Ratings—and total assets of the 500 largest banks worldwide.
The top five banks are German and Swiss but all of New Zealand's main banks, and Kiwibank, are in the first 25 places.
National Australia Bank, the parent of BNZ, is in 16th place, Commonwealth Bank of Australia, the parent of ASB, follows in 17th.
Westpac is 18th, ANZ 19th and Kiwibank 24th.
HSBC came in at number 25 and Rabobank, based in the Netherlands but operating here, was ranked 10th.
It will provide some reassurance to those who have claimed that the Reserve Bank’s Open Bank Resolution policy had cleared the way for a Cyprus-style tax on bank accounts if financial institutions in New Zealand struck trouble.
The policy is designed to facilitate the resolution of a collapsed bank.
Opposition politicians had claimed it allowed for a situation like that proposed in Cyprus – where it was suggested that private bank deposits be levied to rescue the country’s financial system.
But Reserve Bank Deputy Governor Grant Spencer said it was markedly different from the Cyprus proposals.
Spencer said depositors’ money has never been guaranteed, apart from temporary periods, such as under the Deposit Guarantee Scheme from late 2008 to December 2011.
“If their bank fails, depositors have always needed to understand that deposits are not guaranteed. What OBR does is facilitate a rapid and orderly resolution of a bank failure – it does not change the fact that depositors and other creditor funds are at risk. Fortunately, bank failures in New Zealand are rare.”
Mark Lister, of Craigs Investment Partners, said New Zealand banks were among the strongest in the world. But he said people needed to be aware that their bank deposits had always been safe only as long as banks were reliable.
“We’re putting our faith in Westpac to stay afloat, we’re lending them money. We’ve got to be aware the safety of that is only as strong as the banks, hopefully in our case that’s very strong.”
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