CEOs of country's four big banks get A$11.7 mln (NZ$15.3 mln), combined, in annual pay with 31% in fixed pay and rest in bonuses and benefits

I want to make a term or 2 stick to these people.

This is "fiscal child abuse" or "mortgage slavery".

http://www.aim.org/newswire/us-wealth-gap-between-young-and-old-is-widest-ever/

http://www.newgeography.com/content/00452-the-housing-bubble-and-boomer-generation

http://www.macrobusiness.com.au/2011/11/expect-the-revolution-to-grow/

The many people who try and drum younger people, sometimes including their own children, into buying their own first home under these market conditions, are fiscal child abusers.

Time the young people wised up and started "occupying" the local council planners offices as well as the streets the banks head offices are on.

Doing a bit of simple maths proves that it is far more costly to the mortgagee and far more profitable for the banks, if interest rates are low and house prices high; rather than the other way around.

Baby boomers grizzle that they went through periods of mortgage interest rates of 18 to 23 percent. So what. It was still far cheaper for them to get a house at 3x a single income, financed at 20%, than it is for the young today to get a house at 6X a double income, financed at 6.5%.

When interest rates were 20%, inflation - and rises in incomes - were of course something like 15% to 18% per annum. So after a few years your mortgage did not look like much, did it? PLUS, interest rates came DOWN since then and these moaning hypocrites had the lot paid off in only a few more short years.

NOW, our young couple with a mortgage several times bigger relative to their incomes, have no such chance that interest rates will be LOWER for any significant part of the time during their lifetimes; in fact we are in such volatile times that a few percent points increase in interest rates and the bankruptcy of nearly every young household who bought their first home since about 2003, is actually quite likely.

And I have some more new terms to suggest:

"Fiscal child abuse deniers"

"Mortgage slavery deniers"

People in this category infest this site and it is time they started to incur the opprobrium they deserve. Earlier, more christian, more moral, more rational generations would be turning in their graves if they knew what we had come to. An elderly NZ academic recently commented to a friend of mine, "I am surrounded by zombies here at the uni". He said the single worst lie of political correctness, was "the rate of solo motherhood has no consequences for society". Close behind that, is the "evil anglo saxon imperialist, poor noble savage" treaty industry edifice of lies. He is not a specialist in housing issues, but I rate the "environmental hustle"/urban growth containment racket as right up there with these lies and irrationalities.

Oh you are wicked Gummy....

Gummy's portfolio is padded with the sweet stuff huh? To be fair, I think the average is closer to 1% p.a. but who really knows as there is NO regulated transparency. The sooner the MED gets its act together, the better. Trust life is treating you well Gummy?

The New Zealand taxpayers (current and future) did underwrite the OZ banks from 2008 . We did not own them, nor did we take any of the profit but we did hold the risk. What a great deal. And before everyone just blames Cullen, remember that English did not have to just pray and forget, he could have done something about it when he became Finance Minister.

Excessive pay for very straightforwar admin jobs like Bank CEOs in a ologoply banking environment need to be kept well under control. These people are not risking there own money, the are not entreprenuers, they are skilled at rising in a corporate environment, that is all. They money they get in excess of what they are worth to do the job- max 500,000- more like 250,000 is because, in part ,of capture of the enconomy and political system by banking elites. We definitely have to stop them meeting MPs outside of select commities. All those rubgy games and lunches do us no good at all.

The workers are paying the PAYE not the banks, alltough it could be argued that PAYE is becoming more like a payroll tax that companies that offshore jobs do not have to pay. Another good reason for a LAND/WEALTH Tax.

Governemnt should issue its own money rather than debt based money- letting banks do it just shows how much they control us, not us them.

Surely part of the answer to high big 4 bank profits is that NZers are for some reason customers of these banks.   I moved my deposit money to Kiwibank and if i took out a mortgage again i would hope to remain with kiwibank.

Popular support for Kiwibank with actions rather than words will cause the big 4 to operate differently.  It  will also show politicians who made it so hard for Kiwibank to be started to realise that there are votes to be gained in looking after NZers rather than whatever they think they can gain from looking after Australian interests.     But NZ of course needs Australia and cannot operate in a vacuum without it. So presumably the strength of the big 4 also has something to do with the trading relationship NZ has with the much larger Australian economy where without Australian ports and trade i would guess trade for NZ would be much much harder than it is at present. 

In the real world if you want to trade with your neighbours you need relationships with them that suit them and if they are bigger than you then they are going to call the shots.

Where does that figure of 4 come from?    By regulation banks have to provide  an amount of relationship between the time period of  money borrowed and the time period of money lent.

So if a bank creates a 30 year loan and charges a variable rate of interest on some annual local rate  it also has to in some manner have additional lending by longer term financing at say 10 year rates by regulation.

The RBNZ made a big deal during this crisis that the banks have to avoid being overly reliant on local and short term deposit funding and  get more of their funding from sources outside of NZ and for longer terms.

Local funding would probably tend to be short term via retail deposits at call and so forth plus there is the short term 90 day bill market even if that comes from overseas.  Around 62B has to be rolled over every 90 days via 90 day bills.

MF global, Bear Stearns and Lehmans collapsed because they were reliant upon short term wholesale funding and investor confidence for that 'just in time' delivery of working capital, where failure to renew those loans meant they needed to get longer term funding at a time when nobody was willing to provide it.

I bank also with Nordea in Finland.  Obviously nordea as one of the strongest banks in the region has no trouble getting the longer term financing it needs and rates are cheaper here.   Just recently the big 4 australian parents had rapidly rising CDS and it appeared confidance was evaporating.  For now CDS is much lower.  

I am not an expert but there are factors at work here as to why certain rates are payable.   Partly it must be lack of competition.  But there are other reasons