Swaps scheme under closer scrutiny

Press Release – New Zealand Labour Party

Hard-sell banking practices, which have forced a number of Kiwi farmers to quit their land, will come under further scrutiny after Parliaments Primary Production Committee said today it wanted a full briefing from the Commerce Commission on the issue.Damien O’connor
Spokesperson for Primary Industries

21 February 2013

Swaps scheme under closer scrutiny

Hard-sell banking practices, which have forced a number of Kiwi farmers to quit their land, will come under further scrutiny after Parliament’s Primary Production Committee said today it wanted a full briefing from the Commerce Commission on the issue.

“The Commerce Commission is currently assessing information it has on interest rate swaps deals,” Labour’s Primary Industries spokesperson Damien O’Connor said.

“However, given the growing number of farmers forced into these agreements who are now facing huge financial pressure the issue deserves wider scrutiny.

“Under the loans swap scheme farmers are locked into high interest rates they can’t escape unless they pay hefty break fees

“Banks seem to have been extremely vociferous in the way they sold these packages. The committee would be remiss if it didn’t follow through to ensure the primary sectors have not been unfairly disadvantaged through loans swaps.

“I am pleased we now have begun parliamentary scrutiny into a very big and significant issue for the banking, and primary sectors.”

ENDS

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1 comment:

  1. Lan, 21. February 2013, 22:01

    We really need to know the recipe for these various derivative products in that one “swap” can be quite a different “creature” from another, particularly in terms of risk. At present, in my reading of the local situation, they are the “unknown unknowns” of the agricultural industry; some information about how they appear in the accounts of both banks and farms would be welcome, since it seems generally agreed in the various interpretations of the 2008 financial crisis (“going forward” as they say) that the purpose of such products is generally “to circumvent the rules” (Satyajit Das, 2006 – so what’s the story here in Noo Zeeland?