The big fibs the European Central Bank (ECB) told us about Cyprus being a special case with the Russian mafia money only lasted 3 days before the truth came out that other PIGS countries’ (Portugal, Ireland, Italy, Greece and Spain) depositors could also be on the hook for the reckless gambling of their banks.
The golden rule of banking over the last century has been that deposit accounts were private property, and if a bank collapsed, then the shareholders and bond holders would lose their money first. The bank would be wound up, inquiries would be held, the assets sold, and the last people to lose money were the depositors. This process could take years.
A depositors’ bank account was private property, and governments worked hard to make sure this money was guaranteed up to a certain amount (usually $100,000 to $250,000 in most OECD banks).
Investors on the other hand are treated very differently, as these investments (such as the share market, or managed funds) are accepted as more risky but of course have better returns.
Helen Clarke and the Labour Government stepped up to the mark during the financial crisis of 2008, stopping a potential bank run by assuring depositors’ that their bank accounts were guaranteed.
Our ex-Merrill Lynch and US Federal Reserve banker, John Key, along with other leaders around the world have changed this golden rule to make sure the bankers, shareholders and bond holders don’t lose any money, but as an “investor” – note this wording change – the money in your everyday bank account could shrink 10%-80% overnight.
No big inquiries, no bankers losing money. Just your savings. Overnight. Gone. That’s what Mr. English and Mr. Key are planning to have by July.
So, where are we at in this plan to steal your money overnight if you are fortunate enough to have worked hard, and put away a nest egg?
From NZ Herald
“…New Zealand banks are readying their IT systems for Open Bank Resolution, a Reserve Bank policy that in extreme cases like insolvency would see a bank's losses shouldered in part by its shareholders and creditors - including everyday depositors…”
“…The Reserve Bank has the power to freeze bank deposits but up to now has lacked the technical infrastructure to implement it - hence their requirement for banks with retail deposits of more than $1 billion to change their systems and meet their requirements by July 1…”
[link to www.nzherald.co.nz]
Four out of five of New Zealand’s major banks (excluding National Bank) have had scheduled outages of their online banking systems and ATM access in the last 60 days. Has the new Cyprus style Open Bank Resolution software updates already been installed at these banks and the Reserve Bank of New Zealand?
Kiwibank 24th Feb – 3 ½ Hour Scheduled Maintenance Internet Banking
For all you night-owls out there, a heads up that we'll be doing some scheduled maintenance on internet banking from 1.30am on Sunday morning (24th February). We aim to be finished by 5am. Internet banking won't be available during that time. Thanks in advance for your patience. ^RM
[link to www.facebook.com (secure)]
ANZ 10th March 2 Hour Scheduled Maintenance Internet Banking
While we make this update, ANZ Internet Banking, goMoney for Android and iBank will be unavailable from 11:30 pm, Friday 08 March until 6:00 am, Saturday 09 March. They will also be unavailable due to scheduled maintenance from 1:00 am till 3:00 am on Sunday 10 March.
[link to comms.anz.co.nz (secure)]
WestPac 21st March 2 Hours Scheduled Website/Trading Platform Maintenance
The trading website will be unavailable for placing trades, managing orders and checking holdings between 17:00 and 19:00 (Sydney time), Thursday 21 March 2013 whilst we perform scheduled maintenance. We apologise for any inconvenience this may cause.
[link to securities.westpac.com.au (secure)]
ASB Bank 8th March 1 Hour Scheduled Maintenance Internet & Phone Banking
Internet & mobile banking will be unavailable between 2am – 3am on Saturday due to scheduled maintenance.
[link to webcache.googleusercontent.com]
BNZ Bank 18th January 5 Hours Scheduled Maintenance Internet and Phone Banking
We're doing maintenance from 12-5am tomorrow morning which will make Internet, Mobile & Phone banking unavailable. Transfer your cab $ now.
[link to twitter.com (secure)]
Cooperative Bank 18th January 1 ½ Hours Scheduled Maintenance Internet, Phone and ATM Access
On Friday 18 January 2013 there is a scheduled outage to allow for maintenance to the Loaded Everyday product.
This means that between the hours of 5.30am -7.00am on 18 January those members with a Loaded Everyday card won’t be able to:
[link to webcache.googleusercontent.com]
Reserve Bank of New Zealand – Partial List of Scheduled Maintenance for NZ Bank Clearing Systems (non-SWIFT)
ESAS-NZClear change release Outages on 2nd March, 23-24 March, 27-28 March, 20-21 July, 23-24 November
- ESAS is the Reserve Bank of New Zealand’s Exchange Settlement Account System which is used by banks and other approved financial institutions to settle their obligations on a Real-Time Gross Settlement (RTGS) basis.
- NZClear is a real-time settlement system which members access from their premises. This system was formerly known as Austraclear.
[link to www.rbnz.govt.nz]
How does New Zealand compare to Cyprus, which is already under lockdown with the longest bank holiday in history?
The total New Zealand debt of NZ$150 billion is equivalent to about EU$21,682 (NZ$33,624) per New Zealander.
Cyprus is sitting at EU$18 billion is equivalent to about EU$16,120 per Cypriot.
So, the big banks as well as the New Zealand Reserve Bank have been busy pressing update on their software, and we owe more per person than Cyprus which has experienced a dramatic lose of depositors funds.
The question I am still pondering, is why Mr. Key and the National Government risk potentially triggering a catastrophic bank run with these policies when kiwi's realize their mattress won't have a catastrophic failure and take 30% of your money overnight, unless National knows something we aren't privy to.
I'll leave you with a comment from a industry expert
“… it is disgraceful that out government is placing the onus of bank support on the public of New Zealand with zero debate and very little reporting. Bill English must be very upset with the events in Cyprus raining on his parade, of course it is a year behind in its implementation as the banks did not know how to achieve what the Reserve Bank was wanting the to achieve in only one days Bank Holiday. It will be interesting to see what transpires.”
Quote from a anonymous opponent of OBR in the precious metals sector…
Comment by Nick, on 3-Apr-2013 16:56
An alternative conclusion from the evidence of banks upgrading their systems could simply be that banks regularly upgrade their systems...
But yes OBR is scary stuff
Comment by sbiddle, on 3-Apr-2013 17:29
Internet banking is nothing to do with the core banking platform. All you've shown is that regular production updates occur.
Comment by davidcole, on 3-Apr-2013 20:50
Exactly as Steve and Nick says, most banks are still mainframe based, internet banking updates have nothing to do with the mainframes, they're bolted on top with interfaces to the core systems.
Comment by alexx, on 3-Apr-2013 21:19
Why would that sort of change require an outage? That would be like having to reboot when you change a formula in Excel. In any case, if it worries you, get safe deposit box. You will have to pay for it and you don't get interest, but then it really is a deposit and not an investment and contents are free from additional charges or fees.
Comment by stuzzo, on 3-Apr-2013 21:28
Oh well, at least open bank resolution conspiracy theory/ ignorance makes a change from fractional reserve banking conspiracy theory/ ignorance.
Comment by Amos, on 4-Apr-2013 02:44
Thanks for the good writeup. It if truth be told used to
be a enjoyment account it. Look complex to far delivered
agreeable from you! However, how could we be in contact?
Comment by Handsomedan, on 4-Apr-2013 08:44
If you place your money with a bank, you expect interest.
If you expect interest, you must expect that it comes with at least SOME risk.
The likelihood of AU banks shutting up shop in NZ is far less than in virtually any other country in the world. List all the countries where the main trading banks are all A rated or above.
And as others have said...maintenance happens. It often happens on a very regular basis.
The fact that a bunch of banks have upgraded software and enhanced systems proves nothing other than diligence.
Comment by nathan, on 4-Apr-2013 09:08
Helen Clark and Labour mucked up the depositers guarantees scheme which have everyone a big incentive to put millions into South Canterbury Finance
how much did it cost us taxpayers? $800 million?
Comment by Mattnzl, on 4-Apr-2013 09:59
"In any case, if it worries you, get safe deposit box. You will have to pay for it and you don't get interest, but then it really is a deposit and not an investment and contents are free from additional charges or fees."
But not free from raiding by bank/govts. (see US gold confiscation circa 1933)
Comment by Evan, on 4-Apr-2013 10:55
People saying the bank maintenance is proof of nothing, and this is some kind of conspiracy obviously don't read. See the nz herald quote, oh and also they have all the details on the RBNZ websites. See here http://www.rbnz.govt.nz/finstab/banking/4430900.html
And its no different to what happen in Cyprus. The RBNZ clearly says all unsecured creditors would be treated equally in the event that the obr is activated.
Comment by Bill Foster, on 4-Apr-2013 12:39
The OBR is not the problem. It is good policy to allow continued operatiions while the bank is wound up, and follows the priorities for losses that the legal resolution will apply anyway.
The problem is that our transaction s account monies are not secured. All depositors accounts are unsecured. The "matress" monies we bank for safekeeping and money we bank to pay our bills and receive payments from others (i.e. non-interst bearing accounts) should be secured. Since the RB approves the cheque, EFT-POS and online banking systems for payments, they should require banks to offer secured transaction accounts for these monies. Secured accounts are not "haircut" or frozen under the OBR. We already pay transaction fees.
If the bank uses our money to lend or back credit creation to earn interest and pay us for the use of our money, THOSE accounts can be unsecured. But our cheque (transaction) account moneies should be SECURED funds.
This simple change eliminates risk of loss of these monies in a bank failure, and also emilinates discussion on deposit insurance or government guarantee.
Add your voice to requiring banks to provide secured transaction deposit accounts!!
Comment by Beatris, on 4-Apr-2013 13:06
great points altogether, you simply won a emblem new reader.
What might you suggest in regards to your submit that you just made some days ago?
Comment by Grant Morgan, on 4-Apr-2013 15:55
In October last year, at a seminar in Rotorua, I gave a talk titled "Bankrupt world?" which linked OBR to the wider wave of financialisation sweeping the global economy. This talk, which is reasonably short, can be accessed here: http://www.keepandshare.com/doc/4932620/bankrupt-world-pdf-104k
The Rotorua presentation grew out of my much longer analysis from Fenruary 2012, titled "Will your savings be frozen?", which tracks the processes behind OBR in fine detail. This longer analysis is here: http://www.keepandshare.com/doc/4335213/will-your-savings-be-frozen-pdf-394k?da=y
Comment by Linuxluver, on 4-Apr-2013 18:24
It's important to remember that bank depositors are NOT shareholders.
They are customers.
Open Bank Resolution is like confiscating money from people who buy burgers at McDonalds because the restaurant they visit most has gone broke.
This is simply theft.
No other word for it.
Take money from the bank's shareholders....not the customers!
Comment by mattwnz, on 5-Apr-2013 23:17
The government would still have to bail out bank depositors because under this scheme of one bank fails then people who have money in other banks will want to move their money out and into this new government guaranteed bank. This will cause those other banks to also fail. But if those banks were all guaranteed beforehand none of them may have failed. With our major property bubble and nz house prices being the most expensive in the OECD compared to our earnings, and the fact that banks are the ones lending to buy these houses, I think a bank failure isn't as unlikely as we are being led to believe. Listen to the radio nz story that Rod Oran did on this, it is scary.
Comment by Mattman, on 6-Apr-2013 08:57
The bank outages this weekend isn't anything sinister. Its end of daylight savings which means the systems have to be shutdown, times rolled back and then restarted.
Comment by bill blyth, on 2-May-2013 07:14
Sadly very few have understand the seriousness of the OBR. It is not about saving banks but about breaking the back bone of the middle classes , its about you and your assets, and the Govt we have elected is party to this crime.