RBNZ expects more finance company closures

The Reserve Bank has warned in its 6 monthly Financial Stability Report that it expects further rationalization and closures in the non bank deposit-taking sector it now regulates, which includes finance companies, building societies and credit unions. RBNZ Deputy Governor Grant Spencer said many non-banks remained under pressure as they sought to repair damage to balance sheets from the recession. "The non-bank sector is now also faced with the challenge over the coming year of meeting the requirements of the Reserve Bank's new non-bank prudential regime. In meeting these challenges, we fully expect to see further rationalization and closures," Spencer said.