RBNZ warns banks not to restrict business lending too much

The Reserve Bank has signaled again it is concerned that banks have clamped down too hard on business lending during the recession. The Reserve Bank made the comments in its 6 monthly Financial Stability Report. Deputy Governor Grant Spencer said international credit markets had eased, making it easier for New Zealand's banks to raise funds. "The banks nevertheless remain very cautious in their credit and funding decisions. While generally supporting this approach, we have continued to emphasise that the banks should not overly restrict lending to the business sector," Spencer said.