Patterson MarkMARK PATTERSON (NZ First): I take pleasure in rising on behalf of New Zealand First to speak to the Financial Markets (Derivatives Margin and Benchmarking) Reform Amendment Bill. Like Mr McKelvie who's just gone before it does stretch my brain a lot of this stuff. I'm not surprised actually that Mr McKelvie doesn't understand it. I expect he just pays cash for everything. He doesn't need access to derivatives to make his purchases.But it is essentially a very important part of our banking system as we've heard. It brings our financial markets—it standardises them to the international standards in the new international standard that's coming.When I was looking at this actually I was reminded of—remember John Key was going to turn us into the Switzerland of the south when he sort of rode back here as the international banker from Merrill Lynch. I'm not quite sure that we ever quite attained that status. Although I do recall that we turned ourselves into a tax haven at one point and we had to do a bit of backtracking around some of those rules.So it is important that we have a sound financial system. Derivatives are an important part of that we've heard for our banks but also for the likes of our fund managers ACC and the New Zealand Superannuation Fund. So for all those retirement savings our investment managers are using these instruments to leverage their investments. As we've heard there's a lot of risk of course that comes with some of these things. Deborah Russell suggested that maybe even the people that use some of those instruments don't fully understand them. I don't think that's the case at all. I think a lot of those people understood them only too well and were leveraging them for all that they were worth.Those of us that wouldn't have understood them quite as well were vulnerable. We look at the LIBOR financial benchmark the London Inter-bank Offered Rate—as I was wondering what the o" was; I got the first four. But we know that that was manipulated in London in the UK and rigged. So this also protects us as ordinary individuals with our money maybe in a KiwiSaver fund from being exposed to those sorts of frauds. It puts us on a level playing field. I note the EU—we're bringing ourselves into line with the EU the G20; there are these regulations that are coming in on 1 January 2020. This will standardise us and bring us up to date with international best practice. We actually have to have them for our companies to be able to qualify to trade in those markets.Of course derivatives are used I guess for leverage. The quantum of money you're putting up is not necessarily the full rate like Mr McKelvie might with his big wad of cash. So it does allow you to leverage up but also there is a margin on that. The risk is taken by a margin and if one of the parties default then that margin grows across and this is taken by the other parties. So that is covered within this bill—the amendments around margins and the rules around that standardising those rates a little bit.So it does speak to the core of our financial system. With our banking we have got massive amounts of debt in this country. I think we're over quarter of a trillion dollars actually of housing debt. We know we've got $63 billion of agricultural debt; add in Government debt credit card debt and we have close to half a trillion dollars' worth of debt. So that financial system relies on these instruments that—whilst we might not fully understand them—are an integral part and it's important that we have the rules and that regulations and legislation are absolutely fit for purpose to make sure that our financial institutions can operate efficiently.One of the things that were raised within the select committee process was that if we didn't have this it could raise interest rates and with that level of debt in this economy any rise in interest rates is a material cost on this economy and this society.So I'll probably leave my second reading call at that. I think it's been reasonably well traversed particularly by Deborah Russell and others. But it is important that we have these standardised rules. This will allow that to happen. This is important. The committee the whole House may look to throw it round a little bit with the likes of Andrew Bayly and Deborah Russell who do truly understand this stuff and can make sure that this is fit for purpose; as I'm sure the select committee the Finance and Expenditure Committee did a pretty robust job on this because it is highly technical stuff. So I commend Michael Wood in his swan song on that committee for bringing this through all the officials that have been mentioned before—we are really well served by officials and particularly in these types of bills where we're really needing to be guided for the main part. So with that I will commend this bill to the House on behalf of New Zealand First. Thank you Madam Deputy Speaker."