The banking inquiry – we were there, where were the banks?

The multi-party inquiry into New Zealand banks met with submitters in Parliament on Wednesday and Thursday this week. Many interested parties including Finsec addressed the inquiry, but the banks themselves were absent, with the exception of Kiwi Bank.

Finsec’s submission focussed on the need for greater control of lending practices, and greater oversight of the banks generally and presented a brief analysis of banks financial health.

The Council of Trade Unions also gave a high profile submission. CTU Economist and Policy Director Bill Rosenberg said that our banks are charging excessive margins on floating mortgages and credit card rates, and that there is a need for greater regulation of international capital movements to and from New Zealand.

“We also discussed bank charges, competition in the sector, and responsible behaviour of banks,” said Rosenberg. “We note that while some increase in competition may have benefits, we should be cautious as there is an expert view that excessive competition will encourage the high risk behaviour that led to the financial crash in the USA. For this and other reasons, further consideration of suitable supervision and regulation of New Zealand’s financial system is merited in the light of the international and domestic financial and economic crisis.”

Read the Finsec submission here:


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