Provincial Values: 'Solid As.... I'd Say!'

Abstract

"Solid as.... I'd say!" these are the words of Colin "Pinetree" Meads, All Black hero of the 1960's and the face of Provincial Finance in the 21st Century. He may have been a great rugby player but is he qualified to give investment advice to investors in Non-Bank Financial Institutions? With the benefit of hindsight the answer to this question is probably, not. In answering the above, we look at the Legislation governing NBFIs in New Zealand, detailing the protections currently in place, before reporting results of a survey of New Zealand depositors, that attempts to judge their financial literacy and where they turn for investment information and advice. The collapse of Provincial Finance in 2006 provides a case study opportunity to examine the adequacy of the public information, provided both by formal disclosure and informally in the news media. While warning signs were apparent at Provincial Finance many were unaware or unwilling to heed them. The call by many since the collapse has been for greater prudential oversight of NBFIs? Perhaps the role and duties of the Trustee and others could be extended, but then do we as a society take responsibility for individuals' investment decisions.