Who Pays For Lower Interest Rates?

Monday, 19 March 2001, 2:18 pm
Press Release: Bank Customer Action Collective

16th March 2001

Dr Brash’s action to lower bank interest rates is welcomed, but who will pay?

Interest rate falls in recent years has simply caused the banks to raise charges elsewhere. Look at the record, banker’s profits have continued to climb.

While interest rates fall the ordinary customer has paid more and more.

Beware; Dr Brash will take no prudential action to protect you, the ordinary bank customer, as he should.

Conditions of registration of banks in NZ, as laid down in the Reserve Bank Act, state that bankers must act in a “prudent manner” and that they must have appropriate “accounting systems and controls” for the business carried out.

But they don’t.

The responsibility of prudential supervision to ensure the conditions of the Act are observed falls on the Reserve Bank and ultimately the Minister of Finance.

But they choose to neglect this responsibility.

Due to this neglect the National Party Senior Whip John Carter MP told us in Parliament this week that he thought that the best course of action was to sue the Government for failing in their duty to ensure observance.

Also, while in and around Parliament other MPs told us that the “Reserve Bank Act” was not for the protection of ordinary New Zealanders it was simply to prevent the registered banks from going broke.

We don’t accept that, because it is unthinkable that any Act of the New Zealand Parliament could be passed that does not protect the New Zealand public.

Accountability will continue to be demanded by this organisation.

Ends

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