RBNZ's Bollard calls on banks again to 'play their part' and pass on rate cuts (Updated)
27th Feb 09, 11:28am
Reserve Bank Governor Alan Bollard has again called on banks to pass on cuts in wholesale interest rates to customers, saying they had profited from the good times and should not shrink from playing their part during the tough times. He said banks should not underestimate the level of 'corporate anger' over business interest rates being held up. (Updated to include comments on 'corporate anger') "The banks also have a key role in assisting the New Zealand economy," Bollard said in a speech to the Jobs Summit in Auckland. "They face a big challenge operating at his time of fragile international markets, and it is completely appropriate that they should now be very conservative," Bollard said. "However, they have profited from good times in this economy, and we expect them to be there for the tough times too," he said. Bollard said: "That means they need to:
- Keep seeking international funding (as has happened in Australia) and parent support
- Use the support mechanisms put in place by the New Zealand government
- Keep passing on wholesale interest rate cuts
- Keep lending on sensible proposals
- Avoid onerous conditions on lending that have the same effect as a credit crunch."