ACT welcomes RBNZ’s review of banking red tape

Welcoming the Reserve Bank’s review of banking capital requirements, Mark Cameron – who represents ACT on the select committee inquiry into banking practices – says:

“ACT Party has been sounding the alarm about these rules since 2019, so we’re glad to see the Reserve Bank finally take notice.

“These rules are driving up borrowing costs for firms, farms, and families.

“Last week, as part of the Parliamentary banking inquiry, I asked Westpac CEO Catherine McGrath about the effect of the capital requirements. She told me that reversing the capital requirement introduced in 2019 would result in an additional $2 billion circulating in the economy – or about a 50 basis point cut in interest rates.

“BNZ previously confirmed to me that costs are falling particularly hard on famers, with the rules driving up rural interest rates by one whole percentage point. It’s about time our farmers got a fair go to invest in their land so they can feed New Zealand and the world.

“The irony is that by putting pressure on sectors such as farming, these rules risk putting people out of business and fuelling the instability the rules are meant to prevent. Hopefully the Reserve Bank will see sense and scrap these burdensome requirements.”