Interesting...

With everyone now coming off fixed rates and going onto variable or short-term rates, Bollard will be able to influence the markets more when he starts raising the OCR.

And some of you bloggers thought he didn't know what he is doing- Shame on you!!

Watch this space. :-)

@Wally: Bomb? that does not look like a bomb....more like a first nuclear strike, followed by MAD...SCF looks like a disaster area its the follow on shocks that concern me as its unknown.....

I Think there are more floaters than there were in the past?....banks must be seeing a risk so are pricing in for that risk and are setting as high as they dare to avoid the business (I think)...so not so much a rush as no where else to go. Interesting that banks are gauging the risk and seem to be pricing it in.....pity NZers generally cant seem to be able to do the same.

@gazza I think Bollard is a captain with no tiller....all he has is an anchor...he can pull it up or drop it...

@Marky Mark: So sure? from my point of view, some of this is a confidence thing, markets are governed by fear and greed, so its illusion sold to ppl. SCF's collapse, even if investors get their money back [eventually] would make others sit up and question if touching the finance sector is safe at all. Now the knock on is lots of small businesses use finance companies to get plant and expand, also retail does interest credit free deals that's finianced from somewhere, remove these important sectors and that stifles recovery, ppl stay un-employed longer. That also has an impact on the Govn's finances, and maybe its credit rating. The Govn has to bail out SCF, it has to get the money from somewhere "real" so it has to borrow and/or raise taxes....even if not right now from SCF's collapse (lets assume it does, which if its credit rating is downgraded becomes a cert before Oct 2010) then sooner or later other collapses (if indeed they happen) are probably going to cause this shift...its a risk and impact calculation to my mind....except the Govn is covering this as an insurance policy for a small fee.....but also they are borrowing for other things and companies are also borrowing so somewhere are ppl have have to have enough confidence in us to lend....

So taken in isolation maybe yes....its not that big...

regards

Bank Manager, Steps? Haven't seen one of those for decades, either! It's only the Customer Solutions Executive you get to see these days. Maybe that's the problem. By the time there's an issue the CSE has moved on - performance target bonus, and all.