Single trans-Tasman bank regulator 'long way off'

By PAM GRAHAM, STAFF REPORTER

A single Australian and New Zealand regulator of banks and insurers is possible but a long way off, says Finance Minister Michael Cullen.

Officials from Treasury, the Reserve Bank and the Ministry of Economic Development have been commissioned by Cullen and Commerce Minister Margaret Wilson to look at transtasman regulation of the finance sector.

They will report back before Cullen meets Australia's Treasurer next February.

Cullen said the present Australian Treasurer, Peter Costello, favoured mutual recognition, rather than an over-arching single regulator, but some Australian officials favoured a single regulator.

"There are a lot of potential options, a lot of discussion to occur," he said.

"It's a bit early to be concerned that we are jumping straight into a single regulator at this stage."

New Zealand's banking sector is dominated by Australian banks and all of them, apart from Westpac, run their New Zealand operations as separate companies. This, in theory, protects New Zealand depositors if a bank collapses in Australia.

A key question for New Zealand officials was whether the provision of financial services in New Zealand would be enhanced through a joint transtasman approach to banking regulation and crisis management.

New Zealand and Australia are generally working toward standardising business rules, with the goal of creating a single economic market.

They are investigating sharing tax information to try to eliminate tax avoidance, money laundering and the financing of terrorism.

And there is always the chance of a single currency, which was being promoted by the former Australian Deputy Prime Minister Tim Fischer when he was in Auckland last week in his new role of Tourism Australia chairman.