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Speaker 1: Now there is a spectacle of the who's who in banking,

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Speaker 1: finance and politics in the making after the government today

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Speaker 1: announced a public inquiry into competition in the banking sector.

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Speaker 1: Parliament's Finance and Expenditure Committee will lead the inquiry. Genetib

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Speaker 1: Trainey is The Herald's Wellington Business editor and with us,

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Speaker 1: hey do you know, hey, Heather, are we going to

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Speaker 1: get the banking top brass in there?

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Speaker 2: We are? We are? This is going to be a spectacle,

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Speaker 2: as you said. The Nichola Willis, the Finance Minister, has

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Speaker 2: said that she wants the bank CEOs and chairpeople to

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Speaker 2: be brought before the Finance and Expenditure Committee. That's a

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Speaker 2: committee made up of politicians, you know, and politicians from

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Speaker 2: all the parties. She wants the big bosses brought before

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Speaker 2: the committees and questioned on the competition or the lack

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Speaker 2: thereof in the banking sector. Now, she'd like the politicians

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Speaker 2: to look at not just retail banking, so you know,

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Speaker 2: not just what we pay on our mortgages and receive

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Speaker 2: for our term deposits, but also look at business banking

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Speaker 2: and banking. So the business and the rural banking are

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Speaker 2: two types of banking that aunts included in a review

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Speaker 2: that the Communs Commission is currently doing as well into

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Speaker 2: competition in the banking sector.

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Speaker 1: Do you think that there is a case to answer here?

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Speaker 2: Look, I think this, you know, this is an issue.

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Speaker 2: The Commus Commission, I believe is best place to look

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Speaker 2: at it because you know, it's made up of experts

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Speaker 2: and it's doing a deep dive. It's taking a better

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Speaker 2: year to look into the issue.

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Speaker 1: You know, the Communs Commission is not looking at rural ending.

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Speaker 2: Is it. No, it isn't. Yeah, So that's a good point. So,

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Speaker 2: you know, and actually that's an argument that maybe the

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Speaker 2: Commus Commission sud shuld should have included that and definitely

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Speaker 2: should have included business banking. But I think what this

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Speaker 2: will do is provide the politicians with a bit of

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Speaker 2: a platform to, you know, to to grandstand on the issue,

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Speaker 2: but hopefully actually also achieve something. I think this will

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Speaker 2: receive a lot of media attention having those bank bosses

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Speaker 2: quizzed and also having the regulators quizzed. So now that's

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Speaker 2: another interesting part of this. This isn't just going to

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Speaker 2: be the bank boss is getting a bit of a

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Speaker 2: walloping from the politicians. It's going to be the regulators

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Speaker 2: as well, because some parties, particularly act you know, points

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Speaker 2: towards regulation as there is reim in competition.

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Speaker 1: You know, there is real pressure coming on the Reserve

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Speaker 1: Bank about these capital requirements.

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Speaker 2: Right there is there is now the Communis Commission and

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Speaker 2: its draft report pointed to the Reserve Bank's capital rules.

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Speaker 2: These rules are there to keep banks safe, prevent them

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Speaker 2: from collapsing. But the ComCom was worried that you know

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Speaker 2: that the rules are preventing banks from lending to productive

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Speaker 2: parts of the economy and you know, making it difficult

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Speaker 2: for the small banks to compete with the big ones.

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Speaker 2: The ComCom raising this issue has given the banks oxygen

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Speaker 2: also businesses, the rural sect. It's given them all oxygen

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Speaker 2: to say these we don't like these bank capital rules.

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Speaker 2: But people have been following the news. The Reserve Bank

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Speaker 2: isn't having a bar of it and is saying, no,

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Speaker 2: we're sticking to the rules. We're not changing the rules.

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Speaker 2: So you know, so having the Reserve Bank appear before

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Speaker 2: the politicians will also actually probably be one of the

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Speaker 2: most interesting parts of the inquiry to watch.

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Speaker 1: Yeah too, write hey Jena, thank you. As always, appreciated.

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Speaker 1: We'll talk to you next week. Jane tib Trainey, The

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Speaker 1: Herald's Wellington Business Edit.

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Speaker 2: For more from Heather Duplessy Allen Drive, Listen live to

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