Report Number One: The ComCom and the business of banking.
The market doesn’t work, more banks would help, how to get more banks? How to get less regulation, how to get better deals for the customer?
Firstly, don’t hold your breath. The ComCom has looked into power and petrol and banking – not a lot changes.
Nicola Willis didn’t help yesterday morning when she said in response to a perfectly legitimate question about lending practices, that a bank CEO had said they “weight farms differently from houses in terms of risk”, Willis said well they can tell that to the select committee. Which as far as I could work out means nothing, given I'm sure they will.
Then when asked about the banking lobby being powerful, she said “they may be powerful but democracy is more powerful”. Once again, it means nothing. What she was avoiding was the question ‘will you legislate’, and she was avoiding that because she is not legislating.
The same way the previous government made a lot of noise about supermarkets and petrol but were never going to legislate either. Instead, what we got was a sign on the footpath showing the 98 price and a Grocery Commissioner who so far is limited to press releases.
Here is your trouble: we have a lot of banks, we just don't use them. We can switch banks, we chose not to.
Yes, the rules the Reserve Bank has in place to make banks hold money could be changed, some of the regulation could be changed, but will it materially fix the market? No.
This, as I always say, is not to defend banks. Banks are highly profitable. Their margins are higher here than Australia.
But the mistake that is made almost every time, whether its banks, supermarkets, petrol stations, or telcos, is the hype never plays out in reality.
The jawboning gets the headlines, the action fades into obscurity.
Let's talk in a year, and you can show me how fundamentally different the New Zealand banking scene is. Or not.
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.
Nicola Willis didn’t help yesterday morning when she said in response to a perfectly legitimate question about lending practices, that a bank CEO had said they “weight farms differently from houses in terms of risk”, Willis said well they can tell that to the select committee. Which as far as I could work out means nothing, given I'm sure they will.
Then when asked about the banking lobby being powerful, she said “they may be powerful but democracy is more powerful”. Once again, it means nothing. What she was avoiding was the question ‘will you legislate’, and she was avoiding that because she is not legislating.
The same way the previous government made a lot of noise about supermarkets and petrol but were never going to legislate either. Instead, what we got was a sign on the footpath showing the 98 price and a Grocery Commissioner who so far is limited to press releases.
Here is your trouble: we have a lot of banks, we just don't use them. We can switch banks, we chose not to.
Yes, the rules the Reserve Bank has in place to make banks hold money could be changed, some of the regulation could be changed, but will it materially fix the market? No.
This, as I always say, is not to defend banks. Banks are highly profitable. Their margins are higher here than Australia.
But the mistake that is made almost every time, whether its banks, supermarkets, petrol stations, or telcos, is the hype never plays out in reality.
The jawboning gets the headlines, the action fades into obscurity.
Let's talk in a year, and you can show me how fundamentally different the New Zealand banking scene is. Or not.
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.
1 comment:
Dear Mr Hoskings. Subject - The NZ Banking Scene
For the normal "Kiwi" to understand today's issues, on said Subject, one must "return to the past", in the days of (Sir) Roger Douglas, and that wonderful piece of Legislation - The Closer Economic Relations -CER- ( Bill), that was "promoted as being the saviour to NZ industrial, Financial woes (post Rob Muldoon) and would bring both NZ & Australia together on an equal business basis". At the same time, dear readers, you need to research what was happening here in NZ with our - then - banking scene, and the emergence of privately owned Banks
(example - Taranaki Saving Bank [still remains] - there were others). CER - the Australian Banking Groups could not wait to fly to NZ and "buy up large"- ANZ being the lead contender.
Even our BNZ was "sold off".
We had the National Bank of NZ establish in NZ, and when the management of same decided to close the doors - the ANZ Bank splashed to cash.
Kiwi Bank was set up by Jim Anderton, a move to counter the Australian influence, and replace the "ailing/failing Post Office Savings Bank", with the Post Office to be the 'management of this new enterprise'. Sadly of recent times "the management have gone woke" - on who in industry can and/or can not open bank a/cs, or operate existing bank a/cs with them and I wonder if that has been extended toward the common New Zealander, who may be ( in their woke minds) "politically tainted", similar as to what has happened in the UK.
So - ?? "Who in their right mind would want to open a Banking System, here in NZ, when you are up against The Australian Banking Mafia"??
Me thinks Nicola Willis 'is dreaming"!
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