BNZ CFO Adrienne Duarte on how the bank's avoiding a NAB group Australia versus New Zealand funding debate

Will this not make depositors at the BNZ even more exposed to OBR?

 This is a bank with a Loan to deposit ratio of %160 , locking more good mortgages up in covered bonds and leaving depositors in an OBR event getting, most likely very little.

When markets started to worry about Portugal, Ireland, Spain and Greece, they all had  foreign net debt roughly around 100 per cent of GDP. Whether that foreign debt was  mainly due to the government as in Greece or the private sector as in Spain did not  matter too much. Investors had concluded that in times of crisis and uncertainty both  sectors could no longer be neatly separated. That’s why spreads on Spanish government  debt rose quickly despite the Spanish government being less indebted than supposedly  safer Germany.     Across the industrialised world, there is one country that shows a debt profile similar to  the  so‐called PIGS  countries,  and that is  New Zealand. Over the past decade,  New  Zealand’s total overseas debt has risen steeply. In December 2000, it stood at 109 per  cent of GDP. Ten years later total debt had reached 132 per cent, while NZ net debt  stood at 85 per cent of GDP.    The biggest difference between New Zealand and the PIGS is the relatively low extent of government debt. At 25 per cent of GDP, it is way below the debt levels seen in other countries. This does not mean, however, that Kiwis  could relax about their financial  vulnerability. Far from it.         The similarities between Europe’s southern periphery and New Zealand go further than  macroeconomic  indicators.  The  underlying  problems  of  the  Greek  and  Portuguese  economy were a government sector that had become too large, steadily growing welfare  states and poor productivity growth for decades. Admittedly on a different scale, these  developments can also be observed in New Zealand.     In New Zealand, government now accounts for about 45 per cent of the economy – a  full ten percentage points higher than in Australia and more in line with big European  welfare states. It is telling that in the last four years, when the Kiwi economy virtually  stood still, there was only one component of GDP that recorded a positive growth, and  that was government consumption.       http://nzinitiative.org.nz/site/nzbr/files/438%20Web.pdf