Labour & Greens launch inquiry into bank behaviour
Recent events in the banking sector demonstrate the immediate need for an enquiry, said Green Finance Spokesperson Russel Norman today.
“We’re giving the National Government and its support parties a second chance to open the books on our major banks. We desperately need greater transparency at the very heart of our economic infrastructure,” said Dr Norman.
The recent Reserve Bank Report on Funding Costs and Margins highlighted growing bank spreads, especially for floating rate mortgages. The spread is a key indicator of bank profitability and it’s increasing despite what the banks claim.
“It’s time to stop playing cat and mouse with the banks. We need answers. As law and policy makers, we don’t have the information to assess what’s really happening with bank profitability, lending practice, or their exposure to risk. This enquiry will attempt to break that dangerous impasse.”
The inquiry being announced today will focus on into the relationship between the Official Cash Rate and short term interest rates with wide input sought from experts and lay people alike.
“We’re looking for a constructive way forward,” insisted Dr Norman. “We need a strong banking sector. Banks represent the infrastructure of our economy and are central to all economic activity. This is why it is so important they demonstrate that they’re not just hoarding profits while everyone else struggles.”
References:
Reserve Bank report on funding costs and margins:
http://www.rbnz.govt.nz/