Contagion Starts Small

Discussion in 'Economics' started by rsi80, Apr 3, 2013.

  1. rsi80


    How does this square with the Kiwi just hitting a 12-month high? :)

    Markets are also looking at New Zealand, which is proposing a bank reconciliation mechanism similar to the one applied by the Eurozone in Cyprus. It is called Open Bank Resolution (OBR). Google it and read about the debate in New Zealand. We suspect that monies that are able to leave New Zealand are already doing so.

    If I had money in a New Zealand bank and if I had seen a proposal indicating that a governmental authority or the central bank might confiscate some portion of my account if they had to resolve one of New Zealand’s banks, I would be thinking about moving it right now .
  2. One way to stimulate markets is to scare bank money away from the bank and into riskier assets. I wonder if that isn't at least partly what's going on?? Cyprus, NZ, Canada... who's next?