If Sam Knowles wants more kiwi deposits to fund local mortgages well he could try making Kiwi bank more attractive via creating better savings plans , removing ALL transaction fees on cheque accounts while removing the pathetic interest you get on such accounts anyway. Or removing the 'commission' for foreign currency exchange too KB account holders

Don't claim Sam that aussie bond markets are your only option! Try actually competing!
ALL banks must lift their actual liquidity requirements. This is one factor that will help bring house prices back to reality.

I think they paid the Aussies 6.5% on the money they borrowed ,why not NZs DEPOSITORS,of course it would be nice to be enlightened either way.

If the banks did not have the majority of NZ depositors funds where are they?
I only ask because while the finance sector did hoover up deposits it wasn't a major part of the banking system, and those funds are not now available to banks.
Leaves lend less which places a ceiling on the total credit creation avalable to banks, me thinks.

Am I missing something here? Surely if they want to raise more money they need to increase interest rates on savings accounts?

Prior to Kiwibank getting the other mob, National, in charge with a different ideology, Labour although full of dim-witted financially illiterate dip-shits, knew enough to commission Kiwibank to be to the nations community what TSB is to the Taranaki community, a service to society, not a slaveminded commercial pyramid scam,cut a margin out of charging slightly higher deposit interest, then charge less for loans, essentially channel foreign incorporated investment bank created credit through its veins to cut a margin to be returned to the community, not the whole answer, but a damn site better than not having Kiwibank in existance at all. Then came along the foreign incorporated investment bankers co-operatives, the National Party Cabinet Executive, for whom Kiwibank as one of the few nation owned commercial banks providing a nation with a means of distribution of its own money supply should its population ever awake from the drug induced coma, thus it had to be infected with the central banker debt loop of doom virus, thus was instructed to begin borrowing on the international wholesale created credit bond swap markets, slowly the debt servicing costs owed to the privately owned incorporated investment banks will subsume it as a public service.
We must fight to prevent Kiwibank from ever being sold and from ever being loaded to the gunnels with created credit foreign bond debt.
Until now banks teir one capital as part of their reserves has consisted value of mortgages issued at current market value and part of their listed share price capitalisation, bogus virtual bullshit, all volatile assets of which the current value is very hard to judge.
These volatile "near money" assets currently back the banking system, if a price correction occurs it will reduce the capital reserve ratio of banking, thus meaning banks will have to call in loans to maintain capital adequacy requirements, thus the banking regulators have decreed that banks must start to hold more govt bonds as capital reserves, thus the new system favours who?, go on have a quess.?
John Key and his fellow banker co-operatives are using a widescreen gate to herd the sheoples into a trap, setting about encumbering us with massive debt servicing obligations, he claims there will be no asset sales in the first term, none in the second unless there is a public mandate to do so, I allege he is setting up the debt repayment crisis in order that he will not "gain" a mandate from the people to sell public assets, but be "forced" to sell by international banker co-operative owned international regulation agencies.
Once these conditions are set it wont matter who gets elected next election, they will have achieved the predatory lending gaols.

Food for thought Iain, and there was I thinking our sovereign independence was greatly strengthened by the RBNZ requirement for 65% rising to 75%, possibly more, of bank borrowing to be raised onshore.

the 1/3 ratio has been the rule of thumb for centuries for stable banking systems
Gone thrown out in the '90s...the result was the boom and dramatic increase in customer borrowing and drop in savings resulting in excessive consumerism including an unprecedented property boom...
I really cant see the complaint has a legit basis, other than now its a level playing field

What surprises me is Knowles appears from the statement, top banker, and yet seems to have very little knowledge of the history of banking and the essentials to keep it stable.
On the other hand kiwi bank has more or less kept to tradition ratios over the period and done quite well.
Smacks of hypocrisy based on propaganda sry PR machine.

Does Knowles think we are all stupid or something?

I would probably write Sam Knowles's comments off as a total waste of time.

The issue is local deposits overall not just with one bank, and if this ratio helps to make banks offer more realistic rates to local depositors then it's good, instead of going oversea and sidestepping the controls our RBNZ has put into on the economy via interest rates.

So Kiwibank is happy to lend at the same rates as the Aussie banks, but not happy to borrow up to the same rates? they must be doing something wrong somewhere then.

If debt = money, no debt = no money?

@Jacko, but he is saying the reason why it's now tough for Kiwibank is because the aussie banks are now offering decent rates to get local deposits, this indicates less borrowing from the overseas big brothers of the aussie banks, not more.

prophet 101,

No talk of revolution here, only revelation, a diplomatic revival of common decency.

The Banking Empire is the greatest borderless empire ever achieved in history, only a concerted international effort will any longer stand a show of blunting its detrimental impacts upon people and planet

http://www.jamesrobertson.com/g20monetaryreform.pdf

Pg 20 on has a brilliant explanation of usury
http://circ2.home.mindspring.com/Money_and_Debt_Part1_lo.PDF

Hi Fred,
I disagree that debt free money cant be issued in the right circumstances, within monitored parameters of sound methodology, a portion of the monetary base could be granted to build productive social infrastruce such as sustainable energy plants. All other money issued forward as credit to unlock productive resources such as other worthy national social infrastructure, housing for first home buyers and worthy local govt infrastructure I agree to avoid inflation must have the principal and administration costs returned to be cancelled out of circulation by taxation, but I advocate that these loans must not come with the mathematically debt enslaving compound interest attached that ensures that all debt issued can never be repaid and ever increases, thus causes inflated taxation or public assets forced to be sold to the very people who loaned you the credit. 1% compounding interest is roughly the equivalent of 11% simple interest and it increases exponentially the higher the compounding rate. Read page 19 on in pdf browser to comprehend this
http://circ2.home.mindspring.com/Money_and_Debt_Part1_lo.PDF
The above would reduce the cost of credit down the food chain, credit must then be issued in a prudent manner that keeps the means of exchange in circulation somewhere relevant to what is sustainably able to be produced to be exchanged, credit issued in excess of that enters the bullshit realm that has created the financial equivalent of the Cuban missile crisis we are witnessing today.
Fred, you said "The amount of money that a Government can issue is limited only by it's ability to tax", I put it to you that the amount of money issued is limited by the amount of sustainable resources to be unlocked to create enough commerce to provide amble repayment and excess to cover the period in a citizenships lives that they can no longer be expected to work due to the human bodies ageing processes.

A bit of info for those that think my use of the word slavery is "over the top";

"Slavery is more common around the world than at any time in human history, according to the latest research by a British-based academic who advises the United Nations.......The most common form of modern slavery was debt bondage, where a person pledged himself or herself against a loan. That was particularly prevalent in the Indian subcontinent. Another growth area was contract slavery, where workers were tricked into signing away their rights. That was found in south-east Asia, Brazil, Africa, some Arab states and parts of India."
http://www.independent.co.uk/news/uk/crime/slavery-worse-now-than-under-...

http://www.betterbytheyear.org/slavery/what_is_slavery.htm

Fred, what do you think of the loan sharks that take advantage of the "shit rolls down hill" effect, caused by the incorporated international banks, to prey upon desperate people by providing short-term loans at rates that are nothing but enslaving
http://www.labour.org.nz/news/chauvel-has-unscrupulous-loan-sharks-his-s...

Fred, you wouldn't ACT(sure as hell they wouldn't) to stop such practices at all levels in the spectrum?