Bob Edlin: The OCR is trimmed and Govt politicians are cheered....

The OCR is trimmed and Govt politicians are cheered – but savers won’t necessarily be whooping

PoO first heard the news from RNZ: the Reserve Bank had cut the official cash rate to its lowest level in three years – by 25 basis points to 2.25 per cent – to support economic recovery.

That led us to check the announcement on the RBNZ website. This expressed confidence that inflation would ease from where it now sits, at the top of the 1 – 3 per cent target band for monetary policy:

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.