DOES ANYONE ELSE GET THE FEELING THAT THE DEPOSIT GUARANTEE SCHEME IS A STUFF UP?
NBR takes a look and its not good news More here
Finance companies should pay for guarantee
by Fiona Robertson | Monday October 13 2008 - 03:51pm
Including finance companies in the government’s deposit guarantee scheme is a boon for the troubled sector but it raises serious questions over the free fee ride for smaller deposit-takers.
Interest.co.nz publisher David Chaston said the guarantee was “manna from heaven” for finance companies, which have suffered full-on investor flight after recent failures in the sector.
KPMG managing partner Andrew Dinsdale said guaranteeing full deposit sums across non-banks was an “unheard of” move. “… It creates a whole series of questions.”
Finance companies could make more money by dropping deposit interest rates, as they might no longer need to offer higher rates to attract investors, Mr Dinsdale said.
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