Rates Round Up

Deposit war not likely to abate for the next two years: PwC
The deposit war is unlikely to abate for the next two years as new liquidity requirements for banks and non-bank deposit takers are set to put upwards pressure on rates as financial institutions try and restore trust among investors.

Sam Shuttleworth, financial services partner at PricewaterhouseCoopers, said the government's new liquidity requirements for banks that will see them forced to increase the amount of cash they source from retail deposits and long-term wholesale funds is putting "upwards pressure" on deposit rates, and the Reserve Bank's discussion document on similar measures for NBDT will do the same thing.

"Trust needs to be restored and what the Reserve Bank has been doing over the last 24 months is restoring that," he told depositrates.co.nz. "It's very good for those who have savings."

Erceg bankruptcy hangs over Dorchester Pacific
Dorchester Pacific, the finance company that has paid investors 42.5% of $168 million of frozen funds, has had to boost its provisioning by $1 million after boatbuilder Ivan Erceg was made bankrupt last week.