EUFA on finance industry changes

EUFA applauds the government’s actions to protect the finance industry, however from experience our members find it hard to trust the process.

In accordance with the British Prime Minister, Gordon Brown’s actions, the deposit guarantees must be supported by a far greater standard of prudential enforcement than we have experienced thus far in New Zealand.

EUFA is adamant that this is not a matter of party politics and it has constantly insisted that the Government must honour its obligation to uphold the rule of law to ensure that State security is maintained. Accordingly any treatment of this matter as a political football at election time by sworn Members of Parliament is nothing short of an abdication of their duty.

Since the Finance Industry melt down began EUFA has pleaded to no avail with the Government to ensure that compliance to common laws of honesty are enforced on the Finance sector, while good New Zealanders savings have continued to be squandered by an Industry effectively in a state of lawlessness.

Since the sub-prime lending issue was first exposed the NZ Government has strongly denied that the overseas fallout would affect New Zealanders, while to the contrary $5.7billion of peoples savings have been lost/frozen, therefore we can now conclude that the Government stance has betrayed thousands of investors.

Current official claims that the NZ banking industry is more sound than overseas banks should be treated with caution, particularly when Jim Anderton claims that the Reserve Bank Act is not adequate to establish Banks solvency. Therefore the true risk to the taxpayer of the Government deposit guarantee is doubtful.

EUFA Finance Spokesman Gray Eatwell said from Tauranga this morning “It must be remembered that if investors had known the true risks they would not have invested, therefore at this juncture total honesty is paramount”

The fact is that NZ banks have practiced of SUB prime lending at levels equivalent to that of the global experience. In recent years banks have engineered many products designer to convert home owner’s equity/capital gain into debt via 100% + loans, loans to fund shonky investments, revolving credit etc)

EUFA Coordinator of Suzanne Edmonds said this morning “We have known all along that the Government had an obligation to intervene but their denial efforts to is credit us have now been proven to be unfounded”