Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search

 


Governor misled Parliament on bank profitability

3 December 2012

Governor misled Parliament on bank profitability


Reserve Bank Governor Graeme Wheeler misled Parliament at his first appearance at the Finance and Expenditure Select Committee when he told the members that bank profits were “about average or below” most other OECD economies, the Green Party said today.

Data now obtained from the Reserve Bank by the Green Party under the Official Information Act shows that New Zealand banks’ pre-tax returns on assets from 2009-2011 make them the fifth most profitable banks in the OECD, with only Iceland, the Czech Republic, Singapore, and Australian banks more profitable.

“The Governor was wrong to tell Parliament that our foreign-owned banks are only making average, or below average profits,” said Green Party Co-leader Dr Russel Norman.

“The Reserve Bank’s own bank profitability data ranks our big four Australian banks as the fifth most profitable in the OECD.

“Our new Governor’s complacency about bank profitability is concerning. His job is to regulate our banks, not be their champion.”

Earlier in the year, the independent Bank for International Settlements found that Australasia's big four banks were the most profitable in the developed world for 2010 and 2011. In 2011, Australian banks made a pre-tax return of 1.19 percent on assets compared with a global average of 0.36 percent.

“The Governor’s mistake demonstrates one of the limitations of having one person solely responsible for the decisions of the Reserve Bank,” said Dr Norman.

“Boards make better decisions than individuals and are less prone to capture by the industry they regulate. This is why no other OECD country vests this much power in one person.

“The simple fix is to make the Reserve Bank Board accountable for significant Reserve Bank decisions – like setting the Official Cash Rate – and ensure the Board includes representatives from the wider economy, like the export and manufacturing sectors.

“The excessive profitability of our Australian-owned banking sector is to the detriment of other sectors in the economy, like manufacturing and agriculture, and affects anyone on a personal level that has a mortgage, credit card, or has savings in a bank.

“If we care about creating jobs and maintaining our incomes, we can’t afford to have a complacent bank regulator that looks at excessive bank profits and then looks away.”

Reserve Bank profitability data released under the OIA:
http://www.greens.org.nz/sites/default/files/reserve_bank_banking_system_comparisons.pdf

Bank for International Settlement data:


Click for big version.

Source: Bank for International Settlements. 82nd Annual Report. 24 June 2012. p.79.

ends

© Scoop Media

 
 
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

Werewolf: John Pilger, And Making War On China

In July, the New Zealand Defence Force is scheduled to join the latest round of Talisman Sabre, a huge training exercise that Australia carries out biennially in conjunction with all four arms of the US military.

Last time around in 2015, New Zealand contributed 650 personnel, 45 vehicles and two of our $NZ771 million dollar fleet of NH90 helicopters to this regional war game.

What’s weird is that Talisman Sabre is actually a rehearsal for an assault on China and its ability to defend itself. More>>

ALSO:

 
 

Urban Planning Report: Momentum Grows To Replace The RMA

A major new report from the Productivity Commission lays the foundation for action on the growing political consensus that the Resource Management Act and associated laws are failing both cities and the natural environment and need a complete rewrite. More>>

ALSO:

Vaping: Quitline Supports Decision To Legalise Nicotine E-Cigarettes

Today Associate Minister of Health, Hon Nicky Wagner has announced that Government are taking the proactive step of legalising nicotine e-cigarettes, a move which Quitline is pleased to hear and support wholeheartedly. More>>

ALSO:

Gordon Campbell: On The Labour/Greens Deal (And The NZDF)

If Labour and the Greens were hoping their Budget Responsibility Rules (BRR) agreement would foster an unlikely alliance then hey… mission accomplished! Because it isn’t every day that Sue Bradford, the CTU and Matthew Hooton speak with one voice, as happened yesterday. More>>

ALSO:

Until After The Election: Extension Of Report-Back Date For Havelock North Inquiry

Attorney-General Christopher Finlayson announced today that the report-back date for the independent Inquiry into Havelock North Drinking-Water has been extended at the request of the Inquiry’s Panel. More>>

ALSO:

Little Heading For Court: Apology Over Donation/Hotel Contract Claims Not Accepted

Today I want to publicly apologise unreservedly to Mr Hagaman for any hurt, embarrassment or adverse reflection on his reputation which may have resulted from my various media statements. I have offered that apology to the Hagamans. More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
Parliament
Search Scoop  
 
 
Powered by Vodafone
NZ independent news