1
00:00:00,000 --> 00:00:02,320
Speaker 1: And so Westpac's wide into the capital settings debate. In

2
00:00:02,360 --> 00:00:04,800
Speaker 1: simple terms, Adrian All required banks to put aside very

3
00:00:04,880 --> 00:00:06,960
Speaker 1: large amounts of money for a rainy day. The retail

4
00:00:06,960 --> 00:00:09,000
Speaker 1: banks and the finance minister argue it's more than they

5
00:00:09,000 --> 00:00:11,080
Speaker 1: need and by doing that it costs a lot more

6
00:00:11,080 --> 00:00:13,800
Speaker 1: to do business in this country anyway, Massive university banking

7
00:00:13,840 --> 00:00:17,800
Speaker 1: expert Claire Matthews back with us clear, good morning more Ndomike,

8
00:00:18,040 --> 00:00:20,000
Speaker 1: this has a feel of it sort of being sorted

9
00:00:20,000 --> 00:00:21,840
Speaker 1: out by itself. I mean, Nikola Willis seems to be

10
00:00:21,880 --> 00:00:24,440
Speaker 1: aligned with the retail banks. The retail banks will agree

11
00:00:24,440 --> 00:00:26,279
Speaker 1: with each other. Adrian All has gone as this coming

12
00:00:26,280 --> 00:00:26,880
Speaker 1: to an end.

13
00:00:26,920 --> 00:00:30,520
Speaker 2: Ish well, I guess it just depends who the new

14
00:00:30,600 --> 00:00:33,800
Speaker 2: governor is and whether they share that same view. One

15
00:00:33,800 --> 00:00:37,120
Speaker 2: of the concerns I think there is is it seems

16
00:00:37,159 --> 00:00:41,360
Speaker 2: really logical, based on the way the connotations going that

17
00:00:41,440 --> 00:00:44,240
Speaker 2: capital level should reduce. And there is certainly an argument

18
00:00:44,320 --> 00:00:47,440
Speaker 2: that Adrian or in terms of the capital level that

19
00:00:47,479 --> 00:00:51,159
Speaker 2: he put in it was potentially too high. But that

20
00:00:51,200 --> 00:00:53,760
Speaker 2: doesn't necessarily mean we should go back to exactly what

21
00:00:53,800 --> 00:00:56,400
Speaker 2: they were, and that maybe it was a somewhere in

22
00:00:56,440 --> 00:00:58,600
Speaker 2: between that we need to end up, and there needs

23
00:00:58,640 --> 00:01:02,120
Speaker 2: to be that careful analysis. I got to remember that

24
00:01:02,200 --> 00:01:04,680
Speaker 2: capital is there for a purpose. It's not just there

25
00:01:04,760 --> 00:01:08,000
Speaker 2: because it looks good. It's there to make the bank safer,

26
00:01:08,080 --> 00:01:09,440
Speaker 2: and we've got to make sure that they've got.

27
00:01:09,319 --> 00:01:11,080
Speaker 1: The right image give. But it's like insuring yourself. Do

28
00:01:11,120 --> 00:01:13,440
Speaker 1: you ensure yourself for a million dollars or fifty million dollars?

29
00:01:13,480 --> 00:01:14,920
Speaker 1: And that's what it boils down to, wasn't it.

30
00:01:16,440 --> 00:01:19,040
Speaker 2: Well, yes, it's yes and no. We've got to remember

31
00:01:19,080 --> 00:01:20,759
Speaker 2: that when you're talking about the banks, you're talking about

32
00:01:20,760 --> 00:01:23,679
Speaker 2: everybody's money. And if a bank fails and there's not

33
00:01:23,840 --> 00:01:26,000
Speaker 2: enough money to pay you run out, that would have

34
00:01:26,040 --> 00:01:30,039
Speaker 2: a huge impact on individuals personally, but also for the economy.

35
00:01:30,319 --> 00:01:32,199
Speaker 2: So we do need to be sure that the banks

36
00:01:32,200 --> 00:01:34,800
Speaker 2: have got enough capital to make sure that they are

37
00:01:34,880 --> 00:01:36,160
Speaker 2: able to operate effectively.

38
00:01:36,319 --> 00:01:38,440
Speaker 1: My argument has always been, and I'm as simple ton

39
00:01:38,480 --> 00:01:41,280
Speaker 1: I know, but nevertheless, we've seen the GFC, we've seen COVID,

40
00:01:41,400 --> 00:01:44,759
Speaker 1: and we've seen the banks and they literally bathe in money.

41
00:01:44,840 --> 00:01:46,480
Speaker 1: There's no chance they're going to fall over.

42
00:01:48,000 --> 00:01:51,920
Speaker 2: Oh that's a very dangerous thought to have banks. We've

43
00:01:51,920 --> 00:01:53,840
Speaker 2: been fortunate in New Zellen that we've not had a

44
00:01:53,840 --> 00:01:56,360
Speaker 2: bank fail for some time, But we actually have to

45
00:01:56,400 --> 00:01:58,840
Speaker 2: go back to nineteen the early nineteen nineties when the

46
00:01:58,880 --> 00:02:02,280
Speaker 2: Bank of New Zealand have significant problems and did have

47
00:02:02,400 --> 00:02:05,800
Speaker 2: to effectively be bayer out. So it's not that long ago.

48
00:02:06,000 --> 00:02:08,600
Speaker 2: And if you look at the US banks have failed

49
00:02:08,680 --> 00:02:12,720
Speaker 2: more recently. Banks do fail, and just because they haven't

50
00:02:12,919 --> 00:02:14,320
Speaker 2: doesn't mean they're not going through the year.

51
00:02:15,000 --> 00:02:17,240
Speaker 1: What I am interested in at the moment is Nichola

52
00:02:17,280 --> 00:02:20,200
Speaker 1: willis sniffing around as Finance minister. Can she do what

53
00:02:20,280 --> 00:02:23,720
Speaker 1: she seems to want to do while still allowing the

54
00:02:23,800 --> 00:02:25,120
Speaker 1: RB to remain independent?

55
00:02:27,960 --> 00:02:30,880
Speaker 2: But it's a really good question. Effectively, she can't give

56
00:02:31,120 --> 00:02:34,600
Speaker 2: any official ruling. She can't say this is what you

57
00:02:34,680 --> 00:02:38,520
Speaker 2: must do. But obviously she's got the ability to have

58
00:02:38,560 --> 00:02:41,760
Speaker 2: a significant input into the appointment of the new governor.

59
00:02:42,360 --> 00:02:44,960
Speaker 2: And is she going to recommend somebody who takes a

60
00:02:45,000 --> 00:02:48,440
Speaker 2: significantly different view from what she and the government are

61
00:02:48,440 --> 00:02:51,720
Speaker 2: looking at? So indirectly, yes, she's likely to get what

62
00:02:51,720 --> 00:02:52,200
Speaker 2: she wants.

63
00:02:52,280 --> 00:02:54,640
Speaker 1: Good insight, Clear, appreciate your time as always Clear Matthew's

64
00:02:54,639 --> 00:02:56,079
Speaker 1: Massy University Banking expert.

65
00:02:56,600 --> 00:02:58,519
Speaker 2: For more from the Mic Asking Breakfast.

66
00:02:58,680 --> 00:03:02,000
Speaker 1: Listen live to News Too at B from six am weekdays,

67
00:03:02,240 --> 00:03:04,280
Speaker 1: or follow the podcast on iHeartRadio