Review release dates put back

Government officials have put the dates of the sweeping review of financial products and providers back a month.

Friday, August 4th 2006, 6:42AM

Working groups have been looking at eight different aspects of the sector: insurance, non-bank deposit-taking institutions, superannuation, collective investment schemes, equity and debt, and disclosure.

Release of discussion documents was due this week. However a spokeswoman for the ministry said the review covered complex matters and some needed more time to be gone into.

She would not say what those matters are.

Speculation that the non-bank deposit-taking sector would be the focus of intensified regulation has grown in the wake of well-publicised failures such as National Finance 2000 and Provincial Finance.

There have also been calls for compulsory credit ratings for finance companies in the wake of the failures.

However Commerce Minister Lianne Dalziel says there are no systemic problems with New Zealand’s finance sector.

Dalziel confirmed to Good Returns compulsory credit ratings for finance companies will be included in the discussion documents next month, but it is not clear though how strongly that will be put up as an option.

Brook Asset Management’s Paul Glass told a savings and investment conference organised by Jonathan Eriksen two months ago that there seemed considerable reluctance by officials to consider such a move.

"They believe there’s a moral hazard involved. I don’t understand that argument."

Dalziel says the option will be canvassed, but that the government does not believe there are any systemic problems with the industry. "The discussion documents are not a reaction to the recent collapses of National Finance 2000 and Provincial Finance," she says.

"There is no evidence at the present moment that the failure of these finance companies is a manifestation of a systemic problem within the industry that will affect a significant number of finance companies in the industry."

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