Thursday, June 13, 2024

Mike's Minute: Is there enough competition between banks?

It was always coming because it's part of the coalition deal.

But the Willis letter to a couple of select committees sets up, of all the inquires and market studies we have had, probably the most interesting investigation yet.

Banks and whether we are getting a decent deal, is there enough competition?

The rural community is screaming at the moment over their behaviour, there seems a very fair weather/social licence issue there.

The Reserve Bank and commercial banks are at each other.

Observers of the retail operators look on with interest at the margins charged here vs the margins charged in Australia, remembering of course that they are the same banks.

So, a lot to look into.

Like all the other market studies though, whether petrol, or supermarkets, or building supplies, looking into stuff is one thing, working out what to do if anything is another.

What if it's found the Reserve Bank really is a problem? They are independent of the government, so what does the government do?

Kiwibank was supposed to be a disruptor. It isn't, do you do anything about that?

If a farmer is not helped in a way they might have wanted, and the committee finds banks are withdrawing from the rural sector, what actually do you do about that?

On the flip side: banks are successful and we like and want that. The stability of banks is critical to an economy and in that we have been fortunate.

How much has government policy through Covid messed with banks, and lending, and the economy?

We get into DTIs, the LDRs, the treatment of investors, the flow on effect to housing and rentals and first home buyers, and access to money.

This in some way or other touches about every single one of us.

As always with big businesses people will go in with a preconceived notion: banks are thieves, or bullies, or rip off merchants, the Reserve Bank is overbearing.

But, given we seem —rightly or wrongly— to be obsessed with inquires, here goes another one.

The trick is not to have it end up like the others, where next to nothing happens

Mike Hosking is a New Zealand television and radio broadcaster. He currently hosts The Mike Hosking Breakfast show on NewstalkZB on weekday mornings - where this article was sourced.


Kay O'Lacey said...

People seem well-immunized against politicians et al mentioning sums of money including the word: billions. Falsely so, in my opinion, to the extent that if the Australian banks here collectively report their NZ profits as $7 billion per annum, that figure divided by our population of just 5 million equates to NZ$1,400 for every man woman and child per year or slightly less than $120 per month. Seems high to me.

Anonymous said...

Dear Mr Hosking.

Doncha just love it when some "turkey sticks their head above the parapet and screams ...."- this time (gain) it is about NZ Banks.

History lesson - Roger Douglas, Minister Finance in the Labour Govt led by (dear) David Lange - Roger, whose main aim was to remove anything that Robert Muldoon had done - and set about "selling the NZ Family jewels" and created a Act of Parliament - The Closer Economic Relations Bill (CER) with our nearest and dearest cussie's Australia.

This was going to and still does 'hurt' NZ.

Them Aussie's could not get the Waka's moving fast enough, across the Tas, to land on NZ shores, cheque books in hand and the first thing they brought - NZ Banks - wow the "Ned Kelly's" of Australian Banks had a field day.

Now we ended up with - ANZ, by far the biggest NZ Bank, BNSW became Westpac, ASB (which had been set up as an alternative Bank) - later disappeared as a NZ owned Bank and is now owned off shore. All the small Banks that had been setting up - example Taranaki Saving Bank (TSB), around NZ disappeared - thought TSB 'held out' and remained a NZ owned Banking entity- the others, mostly Regional establishments (many) closed their doors.

We had the emergence of The National Bank Of NZ, had an association with Lloyd's Bank of London. It remained the only 'reef' against the other Banks - until the UK owner's decided to 'shut up shop' and the Bank that leaped at the chance of buying - ANZ. Now the greatest Banking monopoly here in NZ AND did the Govt of the time 'say anything, do anything'- NO.

For that matter did the NZ Reserve Bank utter any words??

KiwiBank was "the dream child of Jim Anderton", was set up to counter the Australian influence - worked for a while but of late has become a residence of the Woke & wonderful.

And because NZ banking needs have changed (more on-line), many of the 'current mob' have decided that Bank Branches (example Pahiatua) - no longer had need for such services.

Like wise when they remove cheque books from Banking, the NZ Elderly - got caught short - as many paid bills etc by cheque.

So me thinks any enquiries - by Select Committee or otherwise - "is a waste of time"- because I am not sure who would want to set a Bank in NZ, unless it is BlackRock (USA) - or a CCP owned Bank??!