DR KEY TAKES FINANCIAL PULSE

Banks are central to the economic buffeting we are taking so it makes serious sense to be talking to them. We hope these meetings will be relatively regular.

SO NZ'ERS DO UNDERSTAND WHAT THE BIG ELECTION ISSUE IS

Which issue will most influence your vote?

The economy (4201 votes, 53.5%)
Education (452 votes, 5.8%)
Environment (722 votes, 9.2%)
Health (579 votes, 7.4%)
Law and order (1901 votes, 24.2%)

this from stuff

HICKEY CALLS FOR IMMEDIATE POLITICAL ACTION ON FINANCIAL CRISIS

If you are unsure or unconvinced how serious the current financial situation is then watch this - Remember, the reason that banks are holding their collective breath is they do not want to spook the market while they quietly pray for the politicians to come up with a solution that will give banks more security.

Hickey however says we can't wait and calls for the immediate recall of parliament and a bi partisan solution now..

We agree -

Watch Bernard here

and Hooton has a similar take here

SO THE AUSSIE BANKS ARE HELPING FUND THE BANK DEPOSIT GUARANTEE

And they are none too pleased... From the Australian

AUSTRALIAN banks will be hit by a levy that could run into the tens of millions imposed by the New Zealand Government, for participating in its version of the bank deposit guarantee scheme.

The scheme is voluntary, but with the NZ Government-backed Kiwi Bank already opting in, the others have no choice but to do likewise.

The levy will only apply to banks with more than $5 billion in deposits, which just happens to be only the big four Australian banks, and will apply on 10 basis points on “total indebtedness” above that level.

Australian banks contacted this morning were still in talks with the NZ Finance Department to work out exactly how the scheme applies, but were not impressed.

SOUTHLAND BUILDING SOCIETY - A SOUTHERN BEACON OF FINANCIAL PRUDENCE

Many people wonder why Southlanders tend to weather financial storms better than many investors . One of the reasons is the Southland Building Society. They are owned by their customers but because they have been managed by an exceptional group of managers for many years they have have performed well. Today they have become a bank..

Bloody good show.

US CREDIT CRISIS STARTS TO BITE HERE

I have been astounded over the last few weeks about the number of people who think as a nation we will be isolated from the US credit crisis. We wont be and the trickle down effect has already started.


This from the Herald

The credit crisis that started half a world away is hitting renovators and first-home buyers.

A combination of falling house prices, rising living costs and higher prices for overseas money is forcing banks to tighten their lending policies.

Worst affected will be those borrowing a high proportion of their home's value. But all borrowers now face tougher tests to prove they can pay back a loan.

ASB drastically tightened its lending rules this week, telling brokers that it would generally not lend more than 80 per cent of a home's value.

Its head of retail banking, Ian Park, said ASB would consider applications for more than 80 per cent, "but they will have to be very strong from a servicing perspective".

A year ago, all main banks would lend up to 100 per cent of a home's value.

When house prices were rising and the economy was strong, up to 40 per cent of first-home buyers were getting 100 per cent loans, brokers say.

Massey University banking expert David Tripe said consumer credit had been tightened as banks took a less rosy view of borrowers' prospects.

ASB has also stopped giving "low doc" loans - the credit once advanced to high-earning business people who did not have all the documents to prove their income.

In March, Westpac changed its lending policy to require faster repayment of mortgages that had a high ratio of debt to value.

ANZ and National changed their rules early this year to make it more likely that anyone seeking more than 80 per cent of a home's value would be asked for a registered valuation.