Episode Transcript
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Speaker 1 (00:00):
Now there is a spectacle of the who's who in banking,
finance and politics in the making after the government today
announced a public inquiry into competition in the banking sector.
Parliament's Finance and Expenditure Committee will lead the inquiry. Genetib
Trainey is The Herald's Wellington Business editor and with us,
hey do you know, hey, Heather, are we going to
get the banking top brass in there?
Speaker 2 (00:18):
We are? We are? This is going to be a spectacle,
as you said. The Nichola Willis, the Finance Minister, has
said that she wants the bank CEOs and chairpeople to
be brought before the Finance and Expenditure Committee. That's a
committee made up of politicians, you know, and politicians from
all the parties. She wants the big bosses brought before
(00:40):
the committees and questioned on the competition or the lack
thereof in the banking sector. Now, she'd like the politicians
to look at not just retail banking, so you know,
not just what we pay on our mortgages and receive
for our term deposits, but also look at business banking
and banking. So the business and the rural banking are
(01:02):
two types of banking that aunts included in a review
that the Communs Commission is currently doing as well into
competition in the banking sector.
Speaker 1 (01:11):
Do you think that there is a case to answer here?
Speaker 2 (01:15):
Look, I think this, you know, this is an issue.
The Commus Commission, I believe is best place to look
at it because you know, it's made up of experts
and it's doing a deep dive. It's taking a better
year to look into the issue.
Speaker 1 (01:31):
You know, the Communs Commission is not looking at rural ending.
Speaker 2 (01:33):
Is it. No, it isn't. Yeah, So that's a good point. So,
you know, and actually that's an argument that maybe the
Commus Commission sud shuld should have included that and definitely
should have included business banking. But I think what this
will do is provide the politicians with a bit of
a platform to, you know, to to grandstand on the issue,
but hopefully actually also achieve something. I think this will
(01:55):
receive a lot of media attention having those bank bosses
quizzed and also having the regulators quizzed. So now that's
another interesting part of this. This isn't just going to
be the bank boss is getting a bit of a
walloping from the politicians. It's going to be the regulators
as well, because some parties, particularly act you know, points
(02:19):
towards regulation as there is reim in competition.
Speaker 1 (02:23):
You know, there is real pressure coming on the Reserve
Bank about these capital requirements.
Speaker 2 (02:27):
Right there is there is now the Communis Commission and
its draft report pointed to the Reserve Bank's capital rules.
These rules are there to keep banks safe, prevent them
from collapsing. But the ComCom was worried that you know
that the rules are preventing banks from lending to productive
parts of the economy and you know, making it difficult
(02:47):
for the small banks to compete with the big ones.
The ComCom raising this issue has given the banks oxygen
also businesses, the rural sect. It's given them all oxygen
to say these we don't like these bank capital rules.
But people have been following the news. The Reserve Bank
isn't having a bar of it and is saying, no,
we're sticking to the rules. We're not changing the rules.
(03:08):
So you know, so having the Reserve Bank appear before
the politicians will also actually probably be one of the
most interesting parts of the inquiry to watch.
Speaker 1 (03:17):
Yeah too, write hey Jena, thank you. As always, appreciated.
We'll talk to you next week. Jane tib Trainey, The
Herald's Wellington Business Edit.
Speaker 2 (03:23):
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