Banking and finance briefs: IMF liquidity warning; Krukzeiner; Nuplex (Update 1)

This is a collection of links to news around New Zealand and the world overnight that may be of interest to executives, product managers, regulators, policy-makers in the banking, finance and insurance industries. This was provided exclusively this morning to the paying subscribers to our Banking and Finance newsletter. (Updated to include Nuplex's rejection of Securities Commission charges and the resignation from the Securities Commission board of David Jackson, one of the Nuplex directors) 1. 'Unprecedented liquidity' - The IMF has warned in a new report out overnight that all the money printed during the crisis could end up in developed countries with higher interest rates, creating problems for central bankers.

The longer countries where the crisis originated maintain their low interest rate policies, the more likely it is that inflow surges will continue as investors will seek higher returns in stronger economies.

Here's the New York Times version of the report. 2. Safe...for now - Andrew Krukzeiner, who borrowed from Hanover Finance, has avoided bankruptcy for a few weeks at least, Jenni McManus reports at The Independent. 3. Nuplex directors face action - The Securities Commission announced late last night that Nuplex's directors will face civil proceedings under continuous disclosure rules over their alleged failure to disclose breaches of banking covenants.

The directors involved are John Hirst (Managing Director, Sydney), Robert Aitken (Chairman and non-executive director, Sydney), Barbara Gibson (non-executive director, Melbourne), David Jackson (non-executive director, Auckland), Bryan Kensington (former non-executive director, Auckland) and Michael Wynter (non-executive director, Sydney).

Nuplex responded later this morning saying it was "very disappointed" the Securities Commission had decided to issue proceedings against it and its directors. The company and directors denied any breach of continuous disclosure laws and would defend themselves "vigorously." 4. Rate hike talk - The US Federal Reserve considered raising its discount rate for a second time at its recent policy-making committee meeting, Reuters reported overnight. 5. Lending squeeze - AP reports that Chinese bank lending fell 43% in the first quarter as the Chinese government moved to crack down on the surge of liquidity in China last year that triggered a property boom. 6. Big programme - The IMF announced overnight a US$500 billion increase in its bailout fund. 7. Retailing surge - Electronic card transactions data from Stats NZ showed core retail spending rose 2.2% in March, its strongest since November 2004. 8. 'We're not going back' - Westpac CEO Gail Kelly told a business luncheon that bank funding costs would not return to pre-crisis levels, ABC reported. This was first published in our Daily Banking and Finance newsletter, which is for our paying subscribers. Find out more here.