Reserve Bank joins call for banks to fight inflation

Grant SpencerThe Reserve Bank appeared to reflect Finsec sentiments earlier this week when it argued that banks need to think about broader economic imbalances. Deputy Governor, Grant Spencer, agreed that banks are managing their individual risks adequately, but continued:

“However, it is not clear that banks are taking appropriate account of the systemic risks associated with the rapid growth in their aggregate lending.”

Likewise, the CTU has called for bank economists to stop blaming inflation on low unemployment and look to their own bank behaviour. CTU President, Ross Wilson, noted:

“In a tight housing market such as we have experienced in the last few years we get very high price rises – a 38.5% rise between 2004 and 2006 – but in a tight labour market, we have been getting only modest wage increases.”

“So banks should look in the mirror. They are borrowing huge sums offshore, driving up the current account deficit and helping fuel house price inflation that is forcing houses way out of reach for workers trying to buy their first home.”

Finsec continues to argue that one way inflationary pressure can be reduced is for banks to stop pressuring staff to sell debt products such as mortgages at the expense of high quality customer service.

(thanks to the Reserve Bank for the photo)

Advertisements

0 Responses to “Reserve Bank joins call for banks to fight inflation”



  1. Leave a Comment

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s




You can contact us at:

0800 FINSEC (0800 346 732)
union@finsec.org.nz
www.finsec.org.nz


Creative Commons License
Join Now 0800 FINSEC

RSS LabourStart – act now to help other workers

  • An error has occurred; the feed is probably down. Try again later.

Finsec Photos

Cathie Lendrum

Carl and Oliver

Westpac North East Valley, Dunedin

Westpac North East Valley, Dunedin

piggybank on leash

More Photos

Archives


%d bloggers like this: