Reserve Bank of New Zealand under the spotlight

Reserve Bank of New Zealand under the spotlight.

Last week, the Reserve Bank of New Zealand’s (RBNZ) legal counsel abruptly closed communication on a matter in response to questions relating to an Irish High Court Report. The report sent under the Order of a High Court Judge in 2004 has to have been ignored by the RBNZ or customers who had suffered losses would have been compensated.

The RBNZ response can only be concluded that there is agreement with EUFA’s stand that there is a legal issue to be addressed by the Crown.

The reaction of the RBNZ is consistent with documented evidence that was placed before Hon Simon Power, at a meeting at Parliament last week, specifically in answer to the Minister public statements indicating the Regulatory Authorities ineptitude that caused the loss of billions of dollars of New Zealander’s retirement savings.

Coordinator of EUFA Suzanne Edmonds said from Tauranga today “After working for three years getting to the root of the problems facing investors, we have had to show the Government key factors that allowed the finance industry to collapse.”

The response of EUFA has been to focus on clarifying Minister Hon Simon Power’s public statement; “As investors money hit the floor the regulators involved in this space all looked at each other and said – well – who’s responsible here?”

Evidence was handed to the Minister demonstrating a critical example of the RBNZs (as the senior authority) standard of supervision. The evidence shows the RBNZ, openly ignored the judicious intent of an Irish High Court warning, relating to a Banking group operating in New Zealand, that had evaded Tax (and overcharged its customers) since being taken over by an Australian parent Bank, common to both States.

At the time of its findings, the Irish High Court obviously believed the practice was systemic throughout the Banking group, (including NZ) as has since been proven to be the correct judgment in the NZ High Court.

Five years after the Irish Report was sent, Justice Wild of the High Court (NZ) established that the tax dodge employed had cost NZ $416 Million in back taxes, escalating to $654 million when the correct interest was added. To the EUFA organisations, this significant amount of money is recklessly written off, given the deteriorating level of health care and other important services needed to be paid for.

As stated to Minister Power the tax lost to New Zealand had the effect of depriving the economy of funding, simply because the New Zealand Regulator refused to value cross border regulatory supervision standards. (Under this standard the new Financial Markets Authority (FMA) is destined to fail.)

EUFA has written to the Australian and the Irish Regulators raising its concerns.

Finance Spokesman for EUFA, Gray Eatwell responded to questions, saying, “It is blatantly clear that if the Government truly intends to clean up the supervision of the Finance Industry, they must insist on regulatory standards commensurate with countries where global institutions operating in New Zealand also operate”.

ENDS

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