10 Sep 2012

Banking review recommends strong action and reform in Cook Islands

6:54 pm on 10 September 2012

The author of a report into the Cook Islands banking system says there needs to be strong action and reform if the country is not to stagnate.

The author and former head of New Zealand's Kiwibank, Sam Knowles, says banking in the country is at a crossroads.

Sally Round reports

"Sam Knowles says the Cook Islands needs reform in order to return to economic growth and reverse the outflow of people from the country. His review was commissioned by the Cook Islands government and makes seven recommendations, including reviewing relevant land legislation. It also suggests integrating with New Zealand to create a borderless banking system. Mr Knowles suggests the Cook Islands Ministry of Finance set up a task force to deal with high levels of non performing loans. He also recommends banks establish a credit reference bureau preferably linked to New Zealand so borrowers' credit history would be available across both countries."