Bayly Andrew; Robertson GrantANDREW BAYLY (National—Port Waikato): Thank you Mr Chair. Well I think the first thing I want to talk about is the need for a current credit rating. So clause 59 states A licensed deposit taker must have a current credit rating that is given by an approved rating agency." Now of course I think this links very closely to clause 71 which is about the ability for the Reserve Bank to grant an exemption from the requirements to get a credit rating.This is again just highlighting the issue of non-bank deposit takers who are very concerned about this because there was a great deal of consternation that the Reserve Bank seemed to want to apply these great big costly imposts on a smaller but important and viable part of the banking sector.So there are some exemptions there when considering it. It specifically notes that when considering the matters of an exemption "the size and nature of the businesses" and "the extent to which the risks associated with not having a credit rating could be addressed or mitigated by terms or conditions."So that's a big judgment call for the Reserve Bank. Again it might be useful for the Minister just to highlight what are his expectations of that component part of clause 71. Because I think the committee and certainly National were of the view that this comes back to this issue of proportionality which is covered later in this part Part 3. But making sure that we don't impose unnecessary compliance costs—and the most extensive of that of course is getting the requirement for a credit rating. So maybe the Minister can just sort of identify what he has in mind.Hon GRANT ROBERTSON (Minister of Finance): I thank the member for that query. It really does go to the comments I made in my very first intervention which is that this is the Reserve Bank's role and they need to perform it in a way that is consistent and provide certainty—as the member himself has already indicated—that in their operations we need to give them the flexibility to be able to deal with the range of different institutions that are in front of them and the different circumstances that might arise.The member's really in many ways answered his own question which is if there weren't an exemption regime we'd be having a very different conversation because that wouldn't provide that ability to recognise that this is not a complete one-size-fits-all situation. It has to have some room—some wiggle room—so that's what's effectively created by that. Clause 70 provides that; clause 71 puts some limitations on the exemption power and then—as the member himself has indicated—the committee did some really good work in the proportionality framework that comes in clause 76A within this part.So I think really what that comes to is a balance of ensuring we get certainty flexibility within the system but ultimately the job is the stability of the financial system. We want to make sure that people who get licences are people who can actually run these institutions properly but we also want to see that diversity within the market provided by some of the smaller ones. So the exemption criteria that's in there I think it's a pretty good balance overall."