New Zealand: Wholesale Funding Guarantee Facility
Description
The wholesale funding guarantee facility is designed to:
- Facilitate access to international financial markets by New Zealand financial institutions, in a global environment where international investors remain highly risk averse and where many other governments have offered guarantees on their banks’ wholesale debt.
- Encourage issuers to withdraw from using the guarantee facility, and the Crown to withdraw from offering it, on new issues as soon as the international markets return to normal.
The facility will be available to financial institutions that have an investment grade credit rating (BBB- or better), and have substantial New Zealand borrowing and lending operations. The scheme does not include non-financial (eg corporate and local authority) issuers. This focus on financial intermediaries is consistent with the approach to wholesale guarantee facilities which has been adopted in other countries.
Branches of foreign banks would be included among the institutions eligible for a wholesale guarantee scheme, but only in respect of their New Zealand dollar issuance. Eligibility is restricted to those branches’ issuance of New Zealand dollar securities to avoid any risk of any New Zealand guarantee supporting the funding of the wider group.
Any Evidence-Based Deliberation:
| Question | Result |
|---|---|
| Is there anything in the public record to suggest that evidence of the effectiveness of the proposed measure was considered during official deliberations? | |
| Is there any evidence that alternatives to the proposed measure were considered? | |
| Is there anything in the public record that suggests that empirical evidence informed the comparison across the alternatives available to government? | |
| Was such evidence identified? | |
| Is such evidence publicly available? | |
| Did the official decision-maker in question provide an explanation as to why a chosen measure was favoured over alternatives? | |
| Is there any evidence to suggest that potentially affected trading partners were consulted before the measures were taken? | |
| Is there any evidence that safeguards have been put in place to ensure that implementation of the initiative is transparent and non-discriminatory? | |
| Did the government state its intention to review the measure within one year of implementation? |
Date Discovered:
Implemented: Yes
Date of inception: 1 Nov 2008
GTA Evaluation: Red
Source:
the oficial website of the New Zealand's Treasury < http://www.treasury.govt.nz/economy/guarantee/wholesale >
Government Response:
- 967 reads
