Banking system

PHOTO: ANZ chief Executive Antonia Watson. Photosport

The head of New Zealand’s largest bank is reassuring customers that there is plenty of cash in the ATMs and that the financial system is sound, as economists warn of a shock which could dwarf the Global Financial Crisis.

ANZ chief Executive Antonia Watson also told RNZ that its staff were gearing up for customers to start applying for a mortgage payment holiday from Monday.

That would mean a six-month pause in payments and not losing your house, but interest would still mount in the meantime.

“We’re not ready to hit the ‘go’ button, that will probably be about Monday and that will be the ability for anyone who has their home lending or their business lending backed by a mortgage to be able to pay up to six months deferral of both their principle and interest payments. So over six months you can free up that cash flow you’d otherwise have to put into your mortgage,” she said.

She said banking reforms brought in after the Global Financial crisis of 2007-09, which included guarantees over capitalisation, meant the banking sector was more resilient facing the current crisis.

She added that the state of the New Zealand economy also guaranteed banking stability.

“I think people need to have complete confidence in the banking system in New Zealand… We are extremely well capitalised. We were on a path to be even more well capitalised. That capital is for a rainy day and that rainy day is here and the Reserve Bank has acknowledged that… We have a lot of liquidity, a lot of money to lend…