Roger Partridge: The hidden cost of excessive regulation

Every time New Zealanders apply for a mortgage or business loan, they pay the price for the Reserve Bank’s controversial 2019 bank capital decision to increase capital requirements for major banks by almost 100%.

The decision made our banks much more heavily capitalised than most of their international peers. This extreme conservatism targeted a novel “one-in-200-year” risk of bank failure. The standard benchmark is one-in-100-years.