Interest rate swap sales leave bad smell

Sending National Bank’s black stallion to the knackers’ yard won’t remove the stench of horse manure that many farmers have been left with courtesy of interest rate swap agreements, says Labour’s Primary Industries spokesperson, Damien O’Connor.

“Given the National Bank brand has played a big part in rural lending for years I can understand ANZ’s move to distance itself and the brand from the growing awareness of interest rate swap sales.

“Increasing numbers of farmers are speaking out about having signed these agreements – many of which have proved to be expensive and very unfair - and the Commerce Commission is now assessing information it has on these swaps.

“Farmers who have contacted me about their situation tell me that banks have consistently pushed them into signing complex agreements that have been costly to break.

“In the UK the regulator recommended that banks sit down with farmers and small business owners who had been disadvantaged by the loans and attempt to rectify the situation.

“I hope ANZ/National will honour any such arrangements if regulators conclude the same unfair banking practices have occurred in this country.

“For the most part, banks and farmers have a healthy, mutually beneficial relationship, but the sale of interest rate swaps over recent years has led to growing distrust of banking ethics,” said Damien O’Connor.