Nov 3, 2008

Fallow On The Bank Guarantees

Brian Fallow looks at the latest bank guarantees in today's NZ Herald. He concludes

On the the face of it the designers have done their best to minimise the inevitable difficulties - boundary issues, moral hazard and the need for an exit strategy.
But there is no getting away from the fact that to the extent the facility is used, it heaps risk onto taxpayers and cost onto borrowers.