Parliament

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

 

RBNZ capital requirements will hurt farmers, businesses

RBNZ capital requirements will hurt farmers, small businesses


“The Reserve Bank’s requirement for banks to hold more capital will act as a handbrake on the economy at a time of serious uncertainty”, according to ACT Leader David Seymour.

“The move will increase borrowing costs and reduce lending, putting even more pressure on farmers and small businesses.

“A cost-benefit analysis done by former Treasury Secretary Dr Graham Scott argues the proposals will impose significantly higher costs on the economy than it will deliver in benefits.

“Dr Scott’s analysis suggests the policy will cost households and the economy $1.8 billion each year. The move will reduce economic output by $2.7 billion a year – through higher interest rates and lower firm investment – for a hypothetical benefit of $900 million.

“Costs will be imposed unequally. Riskier borrowers, such as farmers and SMEs, will face a disproportionate increase in interest rates and a reduction in lending. By impacting particular sectors disproportionately, the impact of these proposals will be inequitable.

“The irony of the Reserve Bank’s proposals is that, by putting pressure on sectors such as farming, it risks putting people out of business and contributing to the instability it is supposed to be fixing.

“Another unintended consequence is that it may force borrowers to rely on non-bank lenders. This risks creating a larger unregulated shadow banking industry, setting up a collapse reminiscent of the finance company collapses a decade ago.

“Our banks are already well-capitalised by international standards. The proposals are a solution looking for a problem. If the Reserve Bank forces businesses and farms under, it may well find the very problem it was seeking to solve.”

ends

© Scoop Media

 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines


Mayor of Auckland: Alert Level Change Welcome News

Mayor Phil Goff says the government’s decision to move Auckland to Level 2 from 6am on Sunday will be welcome news for all Aucklanders.
“Moving strongly and quickly to contain this outbreak has once again proved effective in stopping the spread of community transmission and I thank all the Aucklanders who have followed the rules of Level 3 over the past week,” he says... More>>


 


Earthquakes: Tsunami Activity – Cancelled

The National Advisory issued at 2:48pm following this morning's earthquakes near the KERMADEC ISLANDS REGION is cancelled.
The advice from GNS Science, based on ocean observations, is that the Beach and Marine threat has now passed for all areas... More>>

Joint Press Release: Dirty PR Exposed In Whale Oil Defamation Trial

Three public health advocates are relieved that their long-standing Whale Oil defamation trial against Cameron Slater, Carrick Graham, Katherine Rich and the Food and Grocery Council has finally concluded and they are pleased that the truth has come out... More>>

ALSO:


Government: Next Stage Of COVID-19 Support For Business And Workers

The Government has confirmed details of COVID-19 support for business and workers following the increased alert levels due to a resurgence of the virus over the weekend... More>>

ALSO:


Government: Balanced Economic Approach Reflected In Crown Accounts

New Zealand’s economic recovery has again been reflected in the Government’s books, which are in better shape than expected.
The Crown accounts for the seven months to the end of January 2021 were better than forecast in the Half Year Economic and Fiscal Update (HYEFU)... More>>


Covid-19: Auckland Back To Alert Level Three After One New Community Case Revealed

Auckland will move to alert level three for a week at 6am tomorrow morning after two new Covid-19 community cases announced this evening could not be directly linked to earlier cases, the Prime Minister has confirmed.
The rest of the country will move to level two.... More>>

NZ Initiative: New Report Highlights How Our Housing Crisis Could Worsen If We Don’t Act Now

If New Zealand politicians thought the housing crisis in 2020 was bad, the worst is yet to come, warns a new report by The New Zealand Initiative. In The Need to Build: The demographic drivers of housing demand , Research Assistant Leonard Hong ... More>>

Parliament: Kiwi MPs Among The “Most Educated In The World”

New analysis of MP qualifications reveals New Zealand’s Parliament is one of the most educated and highest qualified in the world, and significantly more educated than Australia’s. The research, by Mark Blackham of BlacklandPR and Geoffrey Miller ... More>>

 
 
 
 
 
 

LATEST HEADLINES

  • PARLIAMENT
  • POLITICS
  • REGIONAL
 
 

InfoPages News Channels