Banks should take haircut for Mainzeal

“Banks holding security over Mainzeal assets should take a haircut and allow subcontractors of the failed company to be paid out in full” said Democrats for Social Credit Leader Stephnie de Ruyter.

“Given the fact that the big four Aussie owned banks dragged NZ $ 3.5 billion in profit out of the back pockets of Kiwis in the past year and transferred it to their Australian owners, they can well afford to take a loss on their loans to Mainzeal.

“This is especially so when the credit they advanced to Mainzeal was not money deposited with them by savers, but was created out of thin air by the banks themselves.

“In return for providing Mainzeal with fictitious money, the banks took security over Mainzeal assets.

“While subcontractors provided real goods and services to the failed company and stand to lose everything, the banks provided fictitious money and are in line to be repaid with real money from the sale of Mainzeal assets. This is no better than fraud.

“If subcontractors are repaid, the money will generate further beneficial economic activity, but if the banks are repaid their profits will disappear overseas.

“Those profits have been the best they have made for a number of years, and were made at a time the New Zealand economy was continuing its slide into depression.

“Without repayment, many of those subcontractors are likely to go under – through no fault of their own, further adding to unemployment.

“It’s way past time the banks took a haircut.”

ENDS

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