New Zealand’s banking sector has spent roughly $90 million getting ready for a new anti-money laundering and terrorism financing law which kicks in at the end of next month.
The New Zealand Bankers’ Association today welcomed the election of Business NZ chief executive Phil O’Reilly as chair of the OECD’s Business and Industry Advisory Council (BIAC).
“It’s great that New Zealand has been recognised in this way, and to see this international group getting the benefit of Phil O’Reilly’s leadership and talent as a business advocate,” said New Zealand Bankers’ Association chief executive Kirk Hope.
Established in 1962, BIAC is an independent international business association which promotes business interests to OECD policy makers.
The New Zealand Bankers’ Association is a member BIAC’s finance sub-committee.
Kirk Hope advised concerned customers to speak to their banks as the fees were avoidable.
Bankers Association chief executive Kirk Hope said banks could live with a differential for first-home buyers, but any restrictions on bank lending might simply drive home buyers to more risky unregulated lenders.
Bankers’ Association chief executive Kirk Hope told Firstline the Budget was about getting back to basics.
The government continues to guide the economy in the right direction said the New Zealand Bankers’ Association today in response to Budget 2013.
“The government’s prudent fiscal approach to the economy, underpinned by our strong and stable banking sector, is crucial to our continuing economic momentum in a still fragile global economy,” said New Zealand Bankers’ Association chief executive Kirk Hope.
“The Budget announcement that the government had signed a memorandum of understanding with the Reserve Bank on macro-prudential tools builds on recent consultation with the banking sector, and we look forward to continuing to work closely with the Reserve Bank on the final shape of these tools.
“Concerns have been raised about the overheated Auckland housing market and we applaud the government’s move to address this through the Auckland Housing Accord. This is a positive initiative and recognises this is a supply-driven issue, not a credit-driven bubble.
“If it’s possible to meet the target of 39,000 new homes being consented in Auckland, and when we see the Christchurch rebuilding programme take off, then price pressures should start to ease as supply increases in these critical markets. This will lessen the need to apply any macro-prudential tools.”
The government also announced an intention to explore “micro-financing” partnerships with the financial sector to provide low cost small loans to those on low incomes.
“This would help protect low income families from loan sharks and provide access to responsible sources of lending. We welcome the government’s interest in this area and look forward to working with them on this issue and gaining a greater understanding of what is being proposed.”
“We would have welcomed a greater focus in the area of tax incentives for savings, which would support future economic growth. However we acknowledge the government’s commitment to achieving its surplus targets,” added Hope.
Chief executive Kirk Hope said, “We all have a role to play in the new anti-money laundering regime … This is about New Zealand’s international reputation and fighting crime.”
Cracking down on money laundering is part of a global response to serious crime and terrorism. New Zealand banks are playing their part by implementing a new law which comes into force on 30 June 2013.
Under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 all New Zealand banks have additional obligations to check customer identity and, in some cases, account activity.
This will contribute to public confidence in the New Zealand financial system and bring New Zealand into line with international best practice. The enhanced regime applies to all banks, and other financial institutions, and builds on existing customer identification processes.
Money laundering is the process of disguising the illegal origin of criminal profits. A number of serious crimes drive money laundering globally. These include drug trafficking, fraud, robbery, illegal prostitution and gambling, arms trafficking, bribery and corruption. Combating money laundering makes it harder for criminals to profit from these activities.
Terrorist groups also launder money to hide the origin and purpose of their funds.
“The recently foiled terrorist plot in Toronto is an example of the kind of activity that the law is targeting,” said New Zealand Bankers’ Association chief executive Kirk Hope.
“We all have a role to play in the new anti-money laundering regime. Banks will be asking customers to provide more information about themselves. It’s important to bear in mind the bigger picture here. This is about New Zealand’s international reputation and fighting very serious crime.”
All banks are required to comply with the new law by 30 June 2013. Some banks are implementing the changes earlier to help ensure a smooth transition to the new requirements.
Chief executive Kirk Hope said house prices were not being spurred along by looser credit conditions as the Reserve Bank claimed. Credit growth was running at about 3 per cent. “This isn’t a credit-driven price issue, it’s a supply-driven price issue,” he said.
Reserve Bank of New Zealand