The Treasury has announced that it has approved the wholesale guarantee facility with the BNZ, who are the first to sign up to this arrangement. This wholesale guarantee facility is different from the retail guarantee which now has 61 adoptees. The wholesale facility is there to help New Zealand banks re-enter arrangements in the international moneymarkets, and will give them the backing of the New Zealand Government for any such arrangements made. Although the BNZ has received this approval, it has not made any announcement yet about using it. The Government is charging significant fees for supporting banks in this way. Should the Government be required to deliver on its guarantee, a supporting legal opinion claims that no more parliamentary approval will be necessary to approve its payout - that authority has already been granted.
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