Rumours unfounded

Press, 3 December 1982, Page 17

Rumours unfounded

PA Auckland Withdrawals by anxious depositors with the United Building Society prompted the Reserve Batik to issue a statement yesterday reassuring building society members that their funds were quite safe. Rumours had been circulating in Auckland that the society was to close its doors. United's joint managing director. Mr Clive Tippins, said such reports were “completely unfounded"

The Governor of the Reserve Bank. Mr D. L. Wilks, said that depositors with building societies had

no need to have any concern for the safety of their money. Mr Wilks’ said that the Reserve Bank received regular monthly returns from all societies. Last month's returns showed no reason for concern about the liquidity position or general financial soundness of any building society, he said. The bank had made inquiries on subsequent developments and saw no reason to change its opinion.

“It may be that the rumours, stem from press reports last week of the Prime Minister's speech to the Building Societies' annual meeting when he saad that societies would require sym-

pathetic treatment in view of difficulties caused by this year's Budget." Mr ’ Wilks said.

"He was referring there to the imposition of taxation in the societies and the winding up of the old terminating groups as from April 1. Mr Tippins said United currently had an asset base of $450 million, which included $56 million invested in Government and local authority stock which could be converted to cash by the Reserve Bank. About $lO million was held in cash, and the rest of the society's funds were invested in mortgages and properties. He said that in Auckland

withdrawals yesterday looked like exceeding deposits by $150,000 to $200,000. Mr Muldoon agreed yesterday that comments lie had made about difficulties facing building societies had probably led to a run on the United Building Society. Mr Muldoon told a press conference that the amount involved was quite small.

He said his remarks in a speech to the Building Societies' Association last week had been misinterpreted. "I said I had sympathy for them (building societies). I shall refrain from having sympathy for anyone in future," Mr Muldoon said.