Private development bank proposed

Press, 6 May 1983, Page 10

Private development bank proposed

PA Wellington The four trading banks plan to establish a development bank to provide medium and long-term funding of investment in the New Zealand economy, the New Zealand Bankers’ Association announced. In a statement the acting chairman of the association, Mr P. G. Gilbert, said the new development bank, the go-ahead for which was still subject to official approvals being obtained, would facilitate additional local funding of major and other development projects which made a positive contribution to New Zealand’s balance of payments.

“This would be done by raising medium and long-

term funds in the local and overseas markets,” he said.

The four trading banks are Westpac, A.N.Z., 8.N.Z., and the National Bank of New Zealand.

Mr Gilbert said they saw a need for the development bank to have a longer term deposit base than the individual shareholding banks.

“This would make the development bank better able to provide specialised medium and long-term development loans,” he said. Mr Gilbert said that the Minister of Finance, Mr Muldoon, in a recent letter had expressed pleasure at the trading banks’ continued interest in the setting up of a development bank, which had been first proposed to

authorities in November, 1981.

Some matters still had to be resolved with the Reserve Bank, but it was hoped that these would be finalised soon, he said. Under the proposal all development loans would be arranged and the risks underwritten by the trading banks, and the new bank would have full access to the trading banks’ lending expertise which would avoid duplication of staff and services.

“If the development bank is established on the lines of our proposals it will benefit the national economy by marshalling funds for investment rather than for consumption,” said Mr Gilbert.