“Sometimes two claims contradict each other and can’t both be true,” says ACT Leader David Seymour.

“For example, the Reserve Bank is delaying increases in bank capital to provide ‘more headroom for banks to support lending now by drawing on their capital buffers’. But it also says ‘we are still committed to raising them in the medium term’.

“The Reserve Bank spent years arguing that capital ratios needed to be raised in case there was a crisis. Now there is a crisis, it argues the right thing to do is to let banks use their capital to get through it.

“Which one is it? Were banks undercapitalised? Or are current capital levels adequate for this huge crisis? What sort of crisis did the RBNZ have in mind?

“The Reserve Bank needs to come clean, or the Finance Minister needs to make clear that he will not continue to tolerate such behaviour.

“Of course, the real solution is to admit capital ratios are adequate, but that would require the Reserve Bank to show some humility. The financial sector, and the economy, cannot afford a central bank so stubborn and contradictory.”

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