No. Parliament should have launched an inquiry into Parliament. Just how is it so many pudding heads make it in?

Axis of greed or unfairly maligned?

http://www.stuff.co.nz/the-press/business/2558719/Axis-of-greed-or-unfai...

"Does our government have the stomach to take on big business? [C'mon dude....]

This question needs to be asked in the wake of the decision by National, Maori Party and Act members of Parliament's finance and expenditure select committee not to hold an inquiry into bank interest rates.

This decision comes despite the concerns of Reserve Bank Governor Alan Bollard that the 575 basis points he has slashed from the Official Cash Rate since last July have not been passed on in full to floating and short-term mortgage rates.

This remember, is against a backdrop of the world's worst economic crisis since World War II. This crisis led, last October, to taxpayers' taking on some of the local banks' risk - as banks overseas collapsed - through the Government's Retail Deposit Guarantee Scheme.

Thousands of struggling mortgage holders, small business owners and farmers - who are also voters - would have welcomed a parliamentary inquiry. [Yep, I think that's the case, see NZMEA survey results - 86%] And from the big banks perspective, if they have nothing to hide, they had nothing to lose. Heck, they might have even educated the masses on the complicated, vexed world of how banks' source their funding." Yes, we'd be interested to know more about that:

http://www.interest.co.nz/news/poll-result-45-readers-say-banks-are-prof...

can they investigate why savings rates are so low?????????????????? oh, I forgot again, its only borrowers that matter.

To save people some time here is the snap shot of the press release from NZMEA.

86 percent of respondents supported an inquiry into the financial sector in a survey conducted by the New Zealand Manufacturers and Exporters Association (NZMEA) over the last two weeks of June. This survey comes out on the heels of the Finance and Expenditure Select Committee's decision not to have an inquiry into bank's lending practices.

The survey also found that:

63% of respondents reported that their bank had increased the margins they paid on credit facilities;

57% of respondents reported that their bank had tightened covenants associated with their credit facilities;

55% of respondents reported that their bank had increased charges associated with their credit facilities;

27% of respondents reported that their bank had tried to increase their credit facility costs but maintained existing arrangements when they complained; and

46% of respondents reported that their bank had used the opportunity of any change of credit facilities to increase cross guarantees.

I like what you've written kin. I'm all for parliamentary inquiries in general, because it keeps them busy. The last thing this country needs is for government to stick their nose into things they don't understand and try to fix the problem. If our MPs want to do something to help the economy they should look for ways to cut the cost and size of government in our lives. Every time I see a bad driving, drink driving, smoking, or family violence advertisement on television, I want to vomit.

Wally, you obviously have money deposit in bank, and regreted not buying house like most of your friends...better get over it.

Tina, you obviously have little money deposited in the bank, and regret buying a house like most of your friends...I don't think you'll get over it.....

I have money deposited in the bank, and I certainly don't regret not buying a house. I couldn't think of anything worse than being saddled with that kind of debt right now, especially on a crappy overpriced house.

Tina you dear old thing, I sold property in the bubble time and made a fortune in the share market on WMC thanks to BHP and copper prices. I am quite happy to wait until property prices return to a norm. My loot is reinvested in copper and gold. Don't know which will boom first. Very pleased not to be desperate to sell out of property. I listened to Bollard when he warned the stack of cards was soon to fall.

Select committees are supposed to be the means that stop a small group from infiltrating and establishing total central control of parliament. They are meant to be made up of the most intelectual members representative of the numbers held in parliament by each party. Members of select committees are supposed to vote on conscience based on the evidence presented to them as to whether the debate should be thrown open for public submissions. To see parties voting to preserve other deals they have with the majority party is very concerning.
It is very concerning to hear Bill English fire back in question time that we are not going to have a bunch of backbenchers calling for inquiries.
I agree with the FinSec representative when he said the Government was either impotent or in the pockets of the bankers.
I say yes there needs to be another open debate into banking, monetary and credit systems, allowing public submissions as due to what has eventuated there are many more people schooled up on the practices of international banking since the last debate into future monetary plicy held in 2007.
Goodnight All, will be back to continue the good fight Friday night.

British parliamentary commission is investigating why some banks are trying to sell even more debt to punters.

Hahahaha, Treasury 'officials' get it wrong again. Only $500ooo or so and will we hear from Cunliffe screaming for an inquiry into Treasuries figures on who spent what on limos in the run up to the election? Not bloody likely, right Cunliffe. Oh no we don't want it known that Labour wasted more than National.

Quoting from article above:

"I think the committee was wrong to suggest banks are profiteering by not passing on the last OCR cut. The banks' own figures [the ones laden with bad debt provisions, right?] show their profits are falling because they're having to compete harder for local term deposits and their foreign funding costs are up."

But I think the banks can be criticised in a couple of areas. They are being much more conservative in their lending to businesses then to farmers and households. They appear to be subsidising cheap mortgage rates with higher overdraft rates for businesses and very high credit card rates. [And this isn't 'gouging' businesses and credit card users then?] They would argue the risks are higher, but if that were true they would have shut down new lending to farmers completely. [So it can't be true then, which means....] Instead they are piling even more bad money after good into the rural sector. [This in itself warrants an inquiry - isn't this the same dynamic that happened in the US sub-prime housing sector - this the potential to add more unwanted, unncessary risk into core export sector - what gives?]

"At the end of the day an inquiry could only ever inquire. Could it affect and impact on actual interest rates or effect change? Obviously it can't." Said Craig Foss.

Excellent expectation management Craig - you guys must all go to the same PR school.

There is nothing obvious about an inquiry NOT affecting change, see:

Kiwibank called on to get competitive

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=1058...

The Manufacturers and Exporters Association wants state-owned Kiwibank to step up competition in the business banking sector after its members expressed "clear and deep dissatisfaction" with the major banks.

"...... the committee's attitude appeared to be that the Reserve Bank should be left to look after interest rates, but the issues were "far more complex than looking at the gap between the official cash rate and retail interest rates". Monetary policy and tax settings "lie at the very heart of the economic crisis" and part of the discussion "should involve a debate on the role that Kiwibank might play in driving competition in the mainly foreign-owned banking sector".

An inquiry with the suggested start point and the right minds on the job would have end up - challenging the 'status quo'

Oh, hang on, I understand now.....'status quo' - I forgot that can't be changed can it.

As for:

"Actually, the Reserve Bank announced on Tuesday a new prudential liquidity policy that will have the effect of restricting the banks from going on another borrowing spree offshore to fund new mortgage lending here. That is a real leash, but it got virtually no publicity in the mainstream media. The Reserve Bank is actually being tough with this leash."

Unless something like this is objectivised against some joined-up policy and ratified in the PTA, expect the leash to get slipped as soon as the dog wags it's tail. Make no mistake, it's pretty obvious the tail won't be wagging the dog - it hasn't in the past, it don't now and it won't, or can't in the future.

So little wonder then:

Anger at blocked inquiry into bank profits

http://www.stuff.co.nz/the-press/business/2561061/Anger-at-blocked-inqui...

"Key told a public meeting in Christchurch last month that he was sure interest rates could fall "if the banks would try a bit harder".

"If grandstanding and handwringing fixed problems, then interest rates wouldn't have reached record levels under Labour," said Bill English.

Am not sure who is wringing hands here, but some hands seem to be pulling something.... errr...wool, or worse, maybe?

Remember - "try a bit harder" - is as good as it gets.

Les - the central bankers and their favourite son John Key want Kiwibank privatised asap, for as long as it remains, depending on political will of course, in public hands it potentially offers NZ a means of implementing and distributing its owned debt free based money supply in quick time and if the rest of the world were to cotton on to the tried and tested potential of such a thing, the central bankers hold on the world would come under threat.

Brian Gaynor: The Las Vegas of the currency world

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=1058...

"Clearly, there should be far more high level discussion on the state of the NZ dollar market and any measures we can introduce to reduce its volatile and speculative characteristics while assisting our export sector."

Yep, you'd have thought so Brian, and as you report:

"There is little doubt that our speculative and volatile currency curtails long-term export growth, which is going to be extremely important in helping the country exit from the current recession.

But the Reserve Bank report didn't discuss the prospects of putting some kind of controls on the NZ dollar."

And you make the good point that:

"Currency controls are not an option for New Zealand because it would be impossible for our Government to set the right exchange rate level and then support this against potential attack from US and European hedge funds."

Sure, but more effective monetary policy and appropriate tools would reduce the volatility markedly - and it's just the kind of thing that would have flowed from the inquiry which is the subject of this thread, but....

Oh no, not Francis, Rik and the boys again....

http://www.statusquo.co.uk/

Let's just bang those heads why don't we..... maybe we can even make the world a bit flatter......that's if we can pull our heads out of the sand (or elsewhere) for long enough that is.

Bernard, maybe this could be in your Top 10 at Ten for Monday, Brian G's article I mean.

Cheers, Les.

in the days prior to Iceland, well you know... It's leaders began squarking that speculative forces were undermining it's currency. In the days that followed Iceland's assets were frozen under the terrorism act by the UK so that the UK citizens, councils and pension funds which invested for attractiove interest rate could get their money back. But naturally this could not happen in NZ as you have a much larger population. Tui's anyone.

@janet - yes, exactly - which I would hope suggests he is also clever enough a trader to also know how to prevent such speculative manipulation/destruction. Otherwise, he's just another currency trader with a simple mind, able only to attack, but unable to defend.

The real intelligence in trading/commerce generally (IMO) lies in the ability to defend, or as Stephen Hulme has suggested - to protect capital in a volitile market. JK signed up for just that position when he ran for PM and so far, I don't see much of anything innovative or clever coming out of his Government's management of NZ's economy - despite my thinking he has the intelligence to do it.

If he doesn't do something soon to intervene in the fundamental structure of our economy in a positive way, I can only assume that his part to play in the successful attack on the dollar was just a one-hit-wonder by a mediocre mind, and a greedy opportunist prepared to sell out his own countrymen.

Thanks for posting this, reading your blog I'm amazed how much time you have put into it.