Restoring investor confidence in New Zealand’s financial markets is the major goal of the new Financial Markets Authority, which was formally established Monday, The National Business Review reported. The FMA takes over the functions of the Securities Commission and Government Actuary which are being disestablished, and consolidates other regulatory functions from the Ministry of Economic Development.

A new report by the Organisation for Economic Cooperation and Development (OECD) argues New Zealand to favour a capital gains tax, and lift the retirement age, The New Zealand Herald reported. The OECD's latest economic survey of New Zealand, published today, said lacklustre growth reflected structural shortcomings of the economy. As the 2000s progressed, the main sources of rising prosperity had increasingly become commodity-based terms of trade improvements, credit-fuelled capital gains on property, and rising government spending, the OECD said.

Struggling insurer AMI says it does not yet know if any government bailout will be necessary and its boss says it will be weeks before that becomes clear, The New Zealand Herald reported. John Balmforth, chief executive of Christchurch-headquartered AMI Insurance, said the outlook remained uncertain. "The purpose of the Government support was to provide our customers with confidence in AMI and provide us with time to fully assess the situation, particularly that relating to overall claims from the Christchurch 22 February earthquake.

Collapsed insurer Western Pacific has had its policies cancelled by liquidators, The National Business Review reported. Western Pacific had 7000 policyholders, and entered liquidation on April 1 after receiving 78 claims following the Christchurch earthquake. Liquidators David Ruscoe and Simon Thorn of Grant Thornton said they were unable to sell, transfer or assign Western Pacific's business. "We disclaim the insurance policies as onerous property, the effect of which is the cancellation of all policies immediately," they said.

This week, the Government went to its bankers and asked to borrow a record $1 billion in one week—effectively re-mortgaging an already indebted house just as its retirement costs are about to surge and the ability of its taxpayers to support that cost is about to sag, The New Zealand Herald reported in an analysis. How will we repay that debt in 2019? By then many of the baby boomers making the decisions to borrow now and pay later will be retiring, asking for their "free" national superannuation and "free" health care.

New Zealand’s cabinet has assigned $24 million funding in the first year for the new Financial Markets Authority, which begins operation on 1 May, The National Business Review reported. The budget will increase to $28 million in 2013/14 to reflect the emphasis on market intelligence, investigation and enforcement, and some additional transition costs, Commerce Minister Simon Power said today. The budget for 2014/15 and beyond will be about $26 million – an increase of around 44 per cent over the $18 million budget for the current regulators.

The financial fate of struggling Auckland developer David Henderson hangs in the balance, after creditors voted for his repayment scheme yesterday, The New Zealand Herald reported. Bankruptcy proceedings before Associate Judge Doogue could go to the High Court at Auckland around 10am Tuesday but Daniel Grove, Henderson's barrister, said nothing was certain. Creditors agreed narrowly yesterday to Henderson's $1.5 million repayment of $127 million claims and now Grove will seek court approval of that scheme. "The creditors voting is only the first step.

Struggling Auckland developer David Stewart Henderson just won the right to repay creditors in a partial deal which sees him avoid bankruptcy, The New Zealand Herald reported. Attempts by other developers to strike compromise deals have failed but the ex-Victoria Parks Markets owner succeeded by just .6 per cent. The Princes Wharf developer has claims against him of about $105 million and is offering to repay a pitiful $1.5 million in tranches of about $500,000 gradually. An Australian bank, Inland Revenue and Downer Construction are all chasing him for long outstanding payments.

Allied Farmers, the finance company hobbled by the collapse in value of its loan book, may not be able to repay $7.5 million owed to its failed Allied Nationwide Finance unit when it comes due on July 1, The New Zealand Herald reported. Managing director Rob Alloway is seeking talks with the receivers of ANF about the potential default, which would be the third such event. The ANF receivers, Kerryn Downey and Andrew Grenfell of McGrath Nicol, have reserved their position and are considering options, according to Alloway's statement.

A possible bailout of AMI Insurance will see the Government pump up to $500 million of equity into the ailing insurer and hold the right to take control of the company. But the final cost could be double that, The National Business Review reported. Finance Minister Bill English announced the support package today saying it would only be called on as a last resort if the insurer's reserves were exhausted.