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Speaker 1: Now the Reserve Bank changed the rules that should bring

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Speaker 1: down mortgage lending rates. It's reduced the amount of capital

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Speaker 1: that retail banks need to hold for a rainy day.

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Speaker 1: This was originally set quite high by Adrian or Andrew

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Speaker 1: Body is a financial markets and banking expert and with

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Speaker 1: us AM I being overly optimistic expecting a drop in

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Speaker 1: mortgage lending rates, you.

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Speaker 2: Are, Heather, this is the chicken dinner change. Really it

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Speaker 2: might mean a couple of chicken dinners, but your average

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Speaker 2: mortgage borrower and maybe one for your average depositor.

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Speaker 1: Now, when we've been discussing this in the lead up

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Speaker 1: to this decision actually being taken, what we were told

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Speaker 1: by the retail banks is that in order to pay

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Speaker 1: the same as Australia, the capital requirements have to be

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Speaker 1: the same as Australia. Are we the same as Australia?

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Speaker 2: Now?

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Speaker 1: Are we still higher?

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Speaker 3: No? We're still higher.

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Speaker 2: I mean the capital review was a political move by

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Speaker 2: the Reserve Bank earlier this year when they tried to

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Speaker 2: distract the Finance and Expenditure Committee at its banking inquiry.

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Speaker 2: The Reserve Banks yesterday that it will reduce the bank

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Speaker 2: cost of funds by six spaces points, and we're still

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Speaker 2: a lot more conservative than countries like Australia that we

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Speaker 2: compare ourselves with.

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Speaker 1: In your opinion, do we need to be more conservative?

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Speaker 3: No?

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Speaker 2: I think that the last twenty five years the Reserve

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Speaker 2: Bank has.

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Speaker 3: Done a huge amount of damage to New Zealand.

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Speaker 2: The cost of capital compared to Australia is increased by

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Speaker 2: about twenty percent, and the relative cost of running our

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Speaker 2: banks here is increased by a lot more. And that's

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Speaker 2: about the Reserve Bank overreaching. They've concentrated the banking sector

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Speaker 2: and set up a fortress wall around large incumbents. A

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Speaker 2: Big four consequence is a high cost of capital that

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Speaker 2: makes New Zealand uncompetitive, leads higher inflation, lower productivity and

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Speaker 2: reduce public services.

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Speaker 1: So could we actually have afforded to at Australia would

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Speaker 1: that have been Okay?

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Speaker 3: Well, we've got to do.

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Speaker 2: We've got to match Australia and we've got to allow

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Speaker 2: competition in from Australia.

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Speaker 3: The big deal here is ready competition.

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Speaker 2: The Reserve Bank is not following its remit from the

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Speaker 2: Minister of Finance and ultimately.

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Speaker 3: That's a political problem either.

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Speaker 2: It needs political leadership like we've seen in housing, education, health,

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Speaker 2: to get us out of it.

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Speaker 3: You know, we've got a problem here with the banks.

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Speaker 3: We've got a problem with the Reserve.

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Speaker 2: Bank, and unless we deal with it, we're going to

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Speaker 2: we're not going to be able to afford the need

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Speaker 2: in hospital.

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Speaker 1: Yeah, I hear ye, Andrew, thanks very much, appreciate your

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Speaker 1: take on that, Andrew Body, financial markets and banking experts.

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Speaker 1: If Nichola is looking for around for something that she

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Speaker 1: could actually do to help out with the banking situation,

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Speaker 1: this might be one of them. And on that subject, actually,

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Speaker 1: cheeky old bank, say B and Z has just announced

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Speaker 1: it's lifting its fixed her mortgage rates the longer end

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Speaker 1: so to year up twenty basis points three four five

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Speaker 1: year up thirty basis points. ASB has just announced it's

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Speaker 1: doing the same thing, eighteen months up twenty basis points,

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Speaker 1: two years up twenty six basis points, three four five

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Speaker 1: years up thirty basis points. So that's B and Z,

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Speaker 1: that's ASB and We's back and by my reckoning, and

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Speaker 1: you can tell me if I'm wrong. I think that

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Speaker 1: leaves only A and Z who hasn't done it yet.

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