by Paul McBeth
Bollard told MPs yesterday that there was still work to be done in the non-bank deposit taking (NBDT) sector, and that the new regime aims to help the sector avoid the pitfalls of the past few years during the next downturn.
"We can't have that confidence yet" that the sector has overcome its problems, Bollard told parliamentarians. "We're still seeing a lot of working through in non-bank deposit taking area - it'll be some time before our regulations are fully observed and do the work they need to for the next crisis, not this one."
The central bank has been drip-feeding its plans for the new regime since last year, with the final guidelines for prudential requirements of non-bank deposit takers likely to be released in the next coming months.
Under the regulations, NBDTs need a credit rating issued by Standard & Poor's, Moody's Investor Services or Fitch Ratings, and will have to keep minimum capital ratios.
The final level has yet to be announced, but there is speculation the cost could be prohibitive for some companies to continue operating.
Paul is a staff writer for Good Returns based in Wellington.
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