Yesterday Fran O’Sullivan stressed the danger to the New Zealand economy of not having a guarantee for wholesale deposits.
Michael Cullen said on Agenda this morning that the government is receiving advice around a wholesale scheme but he didn’t seem to see any need for urgency.
Key was also careful to say he sees no imminent crisis, however he does see a need for action.
On the contrary, I remain convinced that, with the appropriate policy responses, our banking system can navigate the challenges that lie ahead in reasonable shape.
However, it is my view that the sooner we are able to resolve the current issues around the deposit guarantee scheme, the sooner we will give certainty to those involved in the banking sector, those who depend on our banks, and others, such as the Australian authorities who, because of the structure of our market, have a close interest in these developments.
At a time when confidence will play an important role in our economy, more certainty sooner, should be our goal.
I am, therefore, making this statement because I want to confirm to Helen Clark and her colleagues that the National Party is prepared to work with them to ensure that decisions can be made during this election period, when it would be too easy for politics to get in the way.
I also want to convey the importance of our government taking a proactive approach to settling the complex matters that are yet to be resolved.
. . . we need to be clear that the overall priority for New Zealand is the continued health of the New Zealand banking system.
I therefore today repeat my offer to Helen Clark that the National Party will support any sensible measures to protect New Zealand’s banking and financial system against the impact of the current international credit problems.
To the extent that these measures require further Crown guarantees, we are prepared to support them in a bi-partisan way.
To the extent that taking such measures would require agreements or actions to ensure that the banks bear their appropriate share of the burden moving forward, I offer our constructive engagement, with the intention of bi-partisan support.
If, for the reasons I have spelt out today, the Government accepts the need to find some form of agreement with the Australian Government about the framework for moving forward, then my colleagues and I will actively support that process.
I will ensure the personal involvement of myself or my colleagues in any discussions the Government wishes to have with the Australian Government in order to provide reassurance about the durability of any understandings that are reached.
The full statement is here.