Cullen signals crackdown on banks

1.00pm

Officials are working on regulating major financial institutions, including banks, Finance Minister Michael Cullen said today.

The work would include looking at a joint trans-Tasman approach to regulation and whether such arrangements could further growth and economic development in New Zealand, Dr Cullen said.

Officials from the Treasury, the Reserve Bank and the Ministry of Economic Development would undertake the work, which followed earlier discussions with Australian authorities on banking regulation.

Australian Treasurer Peter Costello and Dr Cullen announced earlier this year the two countries would work toward standardised business and banking rules, with the goal of creating a "single economic market".

The two countries would also investigate sharing tax information to try to eliminate tax avoidance, money laundering and the financing of terrorism. They would jointly lobby tax havens to exchange tax information, the two finance ministers said after their annual talks in Melbourne in January.

"We would like to work toward a system where we recognise each other's prudential regulations so that banks that are conducting business on both sides of the Tasman reduce their transactional costs, have certainty and consumers in both countries are protected," Mr Costello said.

Dr Cullen today said the key focus of today's announcement was banking but officials would also consider the merits of including insurance under a similar, regulatory approach. However, they would not repeat Law Commission work on life insurance.

The work would be reported back to Dr Cullen early next year.

- NZPA