Oct 23, 2008

Cullen Talks Of Aussie Bank Float

Readers of The Hive will not be surprsies by this news. Michael Cullen is demanding that, in return for a guarantee on wholesale market borrowings, that the banks float more shares in new Zealand.

The Government is reportedly seeking to boost local ownership of the Australian-controlled major banks here in return for a wholesale funding guarantee the banks say is needed to ensure they can raise sufficient cash to keep the economy ticking over.
Finance Minister Michael Cullen was last night reported as saying a partial float of Australian bank shares on the New Zealand sharemarket may be a condition of the wholesale funding guarantee for banks Treasury and Reserve Bank officials are currently drafting.
"Clearly that should be considered carefully as we move towards finalising any details of this scheme," Dr Cullen told TVNZ News.
But National Party finance spokesman Bill English said he would be concerned if Government insistence on such a concession prevented the timely introduction of the guarantee.
"We are now only eight or nine weeks from Christmas and the banks have raised the possibility they may have funding problems that would lead to a sharp contraction in lending by then."

We would be concerned but not surprised if the New Zealand Government was one of the largest buyer of these shares........