Commerce Commission files proceedings against Westpac
The Commerce Commission has announced that it has filed proceedings against Westpac New Zealand.
It says it is assessing new information and is likely to make a new announcement mid-year.
Last December the Commission reported that it anticipated filing proceedings against ANZ, ASB and Westpac by the end of March.
However, the commission says it has been able to actively advance its investigation since then, including through using its new compulsory interview powers, which came into law just before Christmas. It has used these powers to interview current and former bank staff.
"This is a particularly complex case where different facts and circumstances apply to each of the three banks involved. This complexity along with the new information that has been obtained meant that the original March time-frame was no longer realistic," the commission says in a statement.
The commission now anticipates making a further announcement mid-year, once it has furthered discussions with each bank about the information it holds and any possible resolution of the commission's concerns
As this remains an active investigation with prospective court proceedings, it says it will not be commenting further at this time.
Interest rate swaps are a financial derivative product that allows a borrower to manage the interest rate exposure on their borrowing. They were typically provided to large corporate and institutional customers, but from 2005 were offered by various banks to rural customers throughout New Zealand.
In August 2012 the Commission began enquiring into whether interest rate swaps were misleadingly marketed from 2005.
The Commerce Commission announced on December 17, 2013 that it has advised three major New Zealand banks, ANZ, ASB and Westpac, that it intended to issue legal proceedings in March 2014 over their sales of interest rate swap contracts to rural customers.
