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Speaker 1: So the Banking inquiries on the Finance and Expenditure Committee

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Speaker 1: will lead at the Finance Minister. Nikola willis with us

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Speaker 1: on it. Good morning, Good morning man. So it's part

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Speaker 1: of the coalition deal. So how much of this is

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Speaker 1: a box tech for New Zealand first versus you being

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Speaker 1: invested in what might be real issues.

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Speaker 2: I'm very invested in this. We've had a Comments Commission

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Speaker 2: report tell us that our banks have very high levels

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Speaker 2: of profitability compared with banking and other parts of the world.

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Speaker 2: They've described the top tier of banks in New Zealand

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Speaker 2: as being like an olive Gothily they've described and having

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Speaker 2: market power, and that worries me. I believe in competition.

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Speaker 2: Competition drives better services for New Zealanders, It drives more innovation,

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Speaker 2: it drives more productivity. So we owe it to ourselves

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Speaker 2: to get to the bottom of these issues. See whether

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Speaker 2: we can change the regulation, See whether it is more

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Speaker 2: we need to be doing to drive competition in banking.

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Speaker 1: The rural aspect of it. And you hear it at

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Speaker 1: the field Days and they've heard it through the Federated

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Speaker 1: Farmers polls. Is that real in your view?

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Speaker 2: I think it is real. Because what I'm hearing from

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Speaker 2: those in the rural community there is that they have

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Speaker 2: seen a change in behavior from the banks that once

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Speaker 2: where they would be accommodated, they no longer feel that

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Speaker 2: they are. They're finding it harder to access lending, even

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Speaker 2: if they are prepared to pay the interest rates. They

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Speaker 2: point to interest rate differentials where they access loans that

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Speaker 2: are much higher rate of interest than people do mortgages,

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Speaker 2: and all of these issues are having a big effect

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Speaker 2: in the rural community. Around half the farmers are saying

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Speaker 2: it's their biggest pain point. So I think we owe

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Speaker 2: it to our rural communities, who are so important to

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Speaker 2: our productive economy, to look at whether they are being

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Speaker 2: served well by banks exactly.

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Speaker 1: But this is where it gets juicy, because the retail

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Speaker 1: banks will tell you the reason that they're higher is

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Speaker 1: one the risk, but also the reserve bank rules. The

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Speaker 1: Reserve Bank will come along and tell you that the

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Speaker 1: other ones that's all bollocks and it's just and so

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Speaker 1: back and forth it will go, what do you do

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Speaker 1: about it?

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Speaker 2: Well, first of all, you bring that argument before Parliament

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Speaker 2: and you have it out in the open. You have

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Speaker 2: it publicly in the accountable form of an inquiry and

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Speaker 2: we then get to step through the facts that are

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Speaker 2: brought to the table and judge them accordingly. My mind

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Speaker 2: is open if we need to change the regulatory requirements,

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Speaker 2: if the Reserve Bank needs to do things differently, or

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Speaker 2: if the banks need to be brought into line. I'm

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Speaker 2: open to all of that because this is an issue

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Speaker 2: that rarely goes to the heart of whether businesses can innovate,

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Speaker 2: whether they can expand where the New Zealanders can get

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Speaker 2: affordable mending and affordable services. This is pretty big for

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Speaker 2: the economy. I want our economy to grow. This is

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Speaker 2: critical indeed.

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Speaker 1: But the Reserve Bank are independent. How do you interfere

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Speaker 1: with an independent operator if they're the problem.

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Speaker 2: They are independent, but Parliament is in charge of the

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Speaker 2: legislation that guides them, and if that legislation requires amendment

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Speaker 2: in order to bess serve New Zealanders, then Parliament must

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Speaker 2: amend it.

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Speaker 1: Can you say at this point, despite the fact that

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Speaker 1: the inquiry hasn't been held, But I take it from

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Speaker 1: your comments, change needs to happen, and change will happen.

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Speaker 2: Change needs to happen, and change will and the banking

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Speaker 2: sector in New Zealand so that New Zealand is a

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Speaker 2: better served. And I know the banks are powerful, but

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Speaker 2: democracy is more powerful and this inquiry is going to

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Speaker 2: get to the bottom of these issues.

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Speaker 1: Good stuff, nice to talk to you appreciate it very much.

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Speaker 1: Nicola Willis, who's the finance minister, Mike, why don't banks

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Speaker 1: just save everybody a heap of money, time and effort

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Speaker 1: and drop the agg rates to the same as the

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Speaker 1: residential commercial Will Dean, The answer is simple one, because

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Speaker 1: they carry risk. There's a greater risk in lending to

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Speaker 1: a farm than there is to a house owner and

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Speaker 1: to the Reserve Bank set the rules and so in.

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Speaker 1: That is why we're having an inquiry.

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