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ANZ chairman John Key warns against creating 'zombie companies' and 'an asset bubble that's going to burst on us'

ANZ chairman John Key warns against creating 'zombie companies' and 'an asset bubble that's going to burst on us'
John Key.

ANZ New Zealand chairman John Key is warning against the possibility of creating "zombie companies" and "an asset bubble that's going to burst on us further on".

Key, who was Prime Minister between 2008-16, told the Institute of Finance Professionals New Zealand (INFINZ) virtual conference that it was very important in a time of very, effectively cheap, money that "we don't create massive problems down the track".

"So we have responsibilities I think around not creating zombie companies, not creating an asset bubble that's going to burst on us further on. So, there's a balancing act there, and that's the point I would make. We just need to be careful, because in the end if those companies all blow up one day down the track then you can create all sorts of problems."

Key's comments in a panel discussion with the chief executives of ASB, BNZ and Westpac NZ followed shortly after Reserve Bank Governor Adrian Orr had warned about the central bank seeing a rise in highly leveraged loans and in investor activity in the housing market. The RBNZ removed the limits on high loan to value ratio (LVR) lending for banks in May, for a stated period of at least 12 months.

Key said ANZ had "historically been a little lower on the high LVR portion of our book and we are remaining a little more conservative out there - not because we are trying to be awkward - but because we do worry about a potential asset bubble growing".

"It's a difficult one, because on the one hand we want people to get on the property ladder. There's lots of reasons why they want to do that. And actually I think there's lots of historical reasons that prove its a really smart thing to do. And at times of very low interest rates it allows them to own a home as opposed to renting a home and the outcomes are better for them. And it is as asset prices go up tremendously difficult for them to save that deposit. Actually getting the loan is probably the easy bit. And actually probably paying the loan is easy, but it's amassing the 10% or 20% they need...

"But I do think we've just got to be careful we are servicing the sector not feeding a bubble." 

Key stressed that the big risk was if people's financial circumstances changed.

"This is the weirdest recession I've ever been in because, man, it doesn't feel like it when you go to some of the places you go to and it's because it will be affecting one portion of the community who maybe have got less part time work. One of them has lost their job. Those kinds of things. So, it's trying to get people to understand their circumstances might change," he said. 

While he thought there had been a good response from regulators in New Zealand to the Covid crisis, Key did believe there was something else that could be done. 

"If you really wanted me to be out there and bold - I would say I would encourage the Reserve Bank to extend the holiday on the capital requirements," he said.

In March the RBNZ delayed the start date for the phased (over seven years) introduction of increased capital requirements for NZ banks from July this year to July 2021 - with the possibility the start date may be further deferred should conditions require it.

"The only reason I say that - and people would say you always would argue that - is...but...the biggest sector that's going to be affected is agriculture," Key said.

"Now, you can also make the case we've got the biggest book at ANZ. We do, but that book actually on a relative basis has been declining, so it's not purely self interest. But what's going to happen is, if those [capital] requirements start in '21 then you've got this counterproductive thing happening."

Key said the banks were "all full" on agricultural risk, so its the only area they can "reprice". Therefore pushing out the capital requirements start time out a bit further is the sensible thing to do, he said. 

Like all the banks, Key is not keen on the idea of the RBNZ - as it may do - taking interest rates negative next year. At the moment the Official Cash Rate is on 0.25%, but there's a strong expectation the RBNZ will take it negative early next year.

"It's the nuclear option - but I wouldn't go there," said Key, who believed negative rates would create negative sentiment in the market that would be counter productive. 

In terms of challenges ahead, Key picked out the prospect and danger of another growth (such as seen with the finance companies in the early 2000s) in unregulated non-banking operations.

"One of the things that could be a real worry here is that if you start seeing a non-bank deposit sector really growing that starts advertising on the internet and in the Sunday papers and everything else higher interest rates under the illusion that they look like a bank when they are really mezzanine finance providers for property developers,... then hello and welcome to all the problems I dealt with when I was Prime Minister. There's a reason we wrote off a billion dollars on South Canterbury finance and all these kinds of people.

"So, I do worry that it's a space now that customers don't necessarily walk through the door to necessarily get a loan, they go to a broker...It's a great thing. It's flexible, but I think one of the real risks is you get all these....there's this disintermediation of the banks but does it come with a systemic risk to the system in that we get more and more regulated ironically they get less and less regulated but somewhere along the line that does not end in a happy marriage."

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Loo who is talking and why now just after election ?


Bubble blower in chief, turns whistle blower and pony tail puller.


He only cares about the ANZ getting disintermediated, that's it.

Trouble is, he is right


I doubt many people would have been impressed if he'd used a bank chairmanship to ask questions about the housing market that the media wouldn't during an election campaign - and probably rightly so. But it seems people would have had a problem no matter what he did.

I suspect the rising delinquencies in the US commercial real estate market may have something to do with this.
We are all aware of the contagion effect a real estate-led financial crisis could have on our own asset bubbles, especially when major US banks have been structuring commercial mortgages into securities and.... we all know the rest!


To remember that JK is smart as far as money market is concerned and IF he is saying that bubble will burst that initself indicates how bad the siruation is and is real bad as have seen houses going as much as 50% up in just last few months.

Maybe JK is saying now as what is coming is not good and inevitable and he wants to be the one to say 'I said so'.

Timing is everything....


So only now you're worried about a bubble Johnny Boy.... which rock have you been hiding under?


JK have you seen the home page of ANZ
The first thing you see: "Expand your portfolio with 2.55% p.a. fixed for 1 year."
"Start your property investment loan application today." "Apply Now"
ANZ is milking the LVR removal and encouraging LVR loans like crazy specifically to investors to use equity in existing properties.
Inflating the bubble as much as possible.
Paying savers no interest and offering no bank guarantee. Why dont you speak to your customers who are not debt fueled?

the rock in 'rock star economy'


"...the banks were "all full" on agricultural risk, so its the only area they can "reprice".
Oh, really?!
How about the banks reprice the risk inherent in lending to the residential property market? Be picky, if you like, and 'be kind' to solitary property buyers/owners; whatever. There's much to look at on that side of the Risk Equation that can favour Agricultural Production over Asset Speculation.


Exactly right. How about supporting the real economy and correctly pricing the risk of parasitic housing speculation, for a change.


The often overlooked skills misallocation from this 'bubble' economy has led to a Dutch disease of its own.
Some intelligent individuals I went to uni with are working as mortgage brokers, realtors and property managers. Others have a clear 'career plan' to build a property portfolio and then retire to manage it full time.

The number of jobs attached to our housing and migration bubbles is shocking for a small economy with 'massive' skill shortages.

"intelligent " or "greedy" ?


Is John having some regrets about the mess he has caused?


Continued. It was stuffed when he got in, and even more so when he got out. However it's really taken off under the current Labour Govt, continuing the same trends present from 2000 - 2007.


Oh boy, thems some magnificent blinkers you have on there....


Silly me, for using actual data-based observations instead making sweeping statements like Key 'caused' house prices to rise or acting like he personally invented homelessness as first order of business when he came into power. You might feel comfortable rewriting history to suit your own political beliefs, but I guess my blinkered view is that doesn't solve any problems other than giving your favourite team an eternal get-out-of-jail free card.


Helen is the winner when it comes to boosting house prices. She did own six of them. Cindy only has two so has some work to do yet.
From 2017.
"Data from CoreLogic shows house prices grew 49 per cent from 1990 to 1999, under National-led governments.
Then, from 1999 to 2008, prices rose 113 per cent under the last Labour-led government.
Through the most recent government's term, there was 69 per cent growth in house prices nationwide."

I do not even think he had much of a choice really ( ditto the current Govt in the bigger picture ) . Cheap and ever cheaper money is not a NZ but a worldwide problem ; we are too small to swim against that tide.

This bubble is caused by cheap money and no LVR restrictions as a direct result from Cindy and Grants need for 100’s billions of dollars to waste on propping up economy as a direct result to stay in power via scaring the plebs into abdicating all logic and power.

Saying a lot but little that's tangible for people to get their heads around. And it seems like the disintegration of the monetary system and currencies have yet to register with Lord Key (Interest dot co ran a useful article on it y'day). So what is Lord Key talking about? The bubble can actually be maintained while the 'have nots' benefit directly from the new digital currencies. The bubble is derived from the commercial banks. The CBDCs is focused on taking care of the needs of other things such as protecting the vulnerable and business bankruptcies.


Oh the irony!

Does he actually sleep at night, knowing that he is one of the biggest single contributors to the current mess? Or is he in denial?


Makes sense. No one knows the house better than the architect who designed it.

Lord Key never designed the bubble single-handedly. In fact, even at his time at Merrill Lynch, he was more of a middle manager as opposed to director of the orchestra. He's simply a product of and cheerleader of the status quo (well that might not be the case now).


Deliciously ironic.


i find it ironic he is calling on the RBNZ to relax the capital requirements so he can lend more into a bubble?


According, to the Reserve Bank, the new capital requirements mean banks will need to contribute $12 of their shareholders' money for every $100 of lending up from $8 now, with depositors and creditors providing the rest.

Collectively depositors are underwriting the NZ banking racket for practically nil after tax returns.

Who in their right mind thinks this is a practical business decision when there is no money involved at the outset, except an exchange of IOUs between borrower and bank, but huge risk, on many fronts, to those in receipt of unsecured bank liabilities (deposits) in exchange for work rendered or goods and commodities sold?

Agreed Audaxes, but for depositors - what choice do they have? If they can save at all, where to put that cash?

There is nothing in it at all for depositors except risk, risk and more risk. But anywhere else and a couple more layers of risk are added. Especially as any depositors funds are to all intents, the property of the bank.

I find it interesting that some investors in other assets, shares, PM, currencies and cryto-currencies, collectibles, bonds etc chase the huge capital gains, the more the better, and loudly gloat when they profit handsomely. But God forbid homeowners, property investors, first-home buyers and families getting value increases from their homes. Punish those property owners with a value decrease, the more the better

FH, I find that for those who gloat over their gains - those gains are not real. Those people seldom have the courage to take the steps to make any perceived value turn into cash. And indeed one chap I used to speak to regularly, used to love telling me how he'd made $50 k turn into over a $million on the share market. But the last time I saw him I asked him how it was going and he told me he had lost it all on an options gamble. Hubris I guess.

agreed no CG is profit until cashed in, but i have that conversation more with people about houses ten to one over any other type of asset in NZ
example a friend brought her apartment 18 months ago had to remortgage a couple of months ago and was telling me how much she had made as her apartment was now worth X, i asked how she had made that as its not a profit as until she sells it therefore she has not made anything and then where will she live, in a tent.

Ah! But did she increase the size of her mortgage? Possibly to put a little cash in her pocket, or buy something else? That is realising the change in value and is also one of the really big traps the current situation holds for home owners.

no she just wants to pay it off , but i know of many that use it as an ATM for the new car or boat

Then she is a smart lady. I wish her well.

"agreed no CG is profit until cashed in"
I just find this a really weird proposition... you ignore current market value in favour of original cost. I don't know of any of the various professionals associated with property, shares, units trusts etc that share your view.

What is weird about it? A change in value means nothing, it is only some theoretical numbers on paper, until some action is take to realise that value. This action could be selling it, determining the actual value by agreeing on a price and receiving it, or alternatively using that change in value as a security for some other transaction such as borrowing against it.

Sitting at home and feeling important because the $200k house your parents bought 30 years ago is now 'worth' over $1 million is nothing more than hubris and false vanity, and actually delvers you nothing that counts, but does present a risk. Indeed why not trell yourself that it is worth $10 million rather than $1mill? Such delusions have essentially the same value to you until you actually try to do something with it that will determine its actual value.

And by the way if you find a professional anything who does not understand this principle don't deal with them!

because all the others things you list are normally invested in free of debt and leverage, if people wanted to invest in housing under the same conditions i am sure people would clap and cheer them

There would be/are thousands of homeowners who are mortgage free but they get categorized with the highly leveraged by the negative comments. Ps today I bought some shares in a well known and well run property company after I had to sell-off last week. Am very happy just to collect the yield so long as no sp falls

I find it interesting that some investors in other assets, shares, PM, currencies and cryto-currencies, collectibles, bonds etc chase the huge capital gain

What proportion of NZers actually invest in those asset classes? NZers are generally not investors. Kiwisaver is a pseudo-investment.


All assets bubbles are dangerous, and all current asset classes are currently inflated: many people will be, in the future, sorely disappointed by the meager returns that all asset classes will deliver.

But the deep negative social effects of so called "property investors" crowding out first home buyers are of completely different nature to the effect of other bubbles in other asset classes.
It is a bit disingenuous, to say the least, to portray the criticism of housing speculation as directed equally to first home buyers and speculators. Moreover, we should consider the new or potential first property owners, and the new generations who will find extremely difficult to manage to live in their own home.
I have very little time and patience for the whining of the so-called "property investors", to be honest.


Housing is a necessity...those other assets are not...that’s the difference

Though many people for their own reasons choose not to buy a property. The point is that you (not you specifically) can't boast about double digit and triple digit gains in other assets without accepting that property also goes up.

That’s not the point, the point is that people that want to should be able to buy a house without having to acquire massive amounts of debt.

Don't buy a flash home in auckland... problem solved !

Don't buy a home in auckland period. lol You're still paying 10x median wage for a tiny shoebox in Papakura with no backyard

Or Tauranga, Hamilton, Wellington and so on...


No one is going homeless because Tesla stock is overvalued. There's a difference between housing and other investments.

Everybody needs a power account. And power companies work to produce significantly higher and higher profits each year to maintain credit with shareholders, who pays for that... yes you guessed right. Rather hypocritical to say that's ok

If power companies are charging too much then someone can create their own power company to undercut them. Alternatively, you can stick some solar panels on your roof and avoid the power COs entirely.

Theres a fixed supply of land, if people buy it up and jack up the price no one can make more of it and undercut the market.

Yes retired pensioners can just start a power company, did you know they die from the cold.

The main problem and difference is what's actually happening and what it all means. If NZ's urban areas were improving in value (more better paying jobs, more schools, better and more transport, less crime, more parks etc...) and this was causing house prices to rise that would be fine. The fact is though, house prices are rising due to shortages. Which simply means one mains house price rise is another mans increased required deposit and debt needed to get into the market. Housing is a basic right. Owning shares in Apple is not.

House prices rising due to shortage of houses = more homeless, worse health outcomes for those without housing as it cuts into their expenditure elsewhere etc...

Share prices rising? Well unless that results in companies say having extreme market power and you being forced to transact with them then you're not really effected if you didn't buy the shares early enough...


Merrill Lynch's Bubble O'Bill has spoken.

Well, he created the rock star economy now it's mud pond economy!

The Glengarry Glenn Ross economy


Why was this not tagged as sponsored advertising? In a time of unprecedented risk for the banking sector the chairman of NZs biggest bank is touting the idea of delaying the new capital requirements for banks. Disgraceful and shameless!

Oh, wow. That's a couple of minutes I will never have back again

History says it was $1.7 billion taxpayer bailout to 35,000 depositors in SCF. About 48k per vote. Too bad the good people of Rangitata electorate have short memories. At least Waitaki and Selwyn held the line.


There are asset bubbles appearing all over the place and I am really worried! Don't worry though, I have the solution - make my bank more profitable, that will fix it!

If it's not clear who Don Key works for, it certainly should be now. And it's not in the NZ publics best interest and likely never was, even when he was PM.

Not only ANZ then! Ther's a pattern emerging here.....

Highly leveraged investors borrow up large - ASB

Can't understand all the John Key attacks here. He just saying be careful. I be more concerned if young people load themselves up with debt what could become a heavy load, like our current pm.


Agreed and now he has been gone from leader for more than 4 years and still nothing has changed with immigration and the housing bubble so you can hardly still be blaming him, I mean are you still going to be blaming the guy 10 years down the track ? come on. Labour has been in for 3 years and did absolutely zilch. My prediction is that in another 3 years it will still be zilch. What we had all better be praying for is that the USA doesn't collapse and fold or else Labour will be running round like headless chooks because they will have no idea what to do.

Nicely put. National would be headless chooks too, even if Lord Key were still around.


The foreign buyer ban, extension of bright line test (two to five years) and strengthening of anti-money laundering act were all steps in the right direction. There were also multiple changes to tenancy rules. I agree that Labour have not done nearly enough, and I don't think that they will, but it's disingenuous to suggest that they're even close to being as awful as National were, and would've been if re-elected.


"The foreign buyer ban, extension of bright line test (two to five years) and strengthening of anti-money laundering act were all steps in the right direction." - to you perhaps - on purely symbolic level . Did nothing to slow down house price inflation ..

That's pretty hard to establish - perhaps house prices would have gone up even more if those things hadn't been implemented. It's very difficult to know for certain what effect if any they had.

In that case what is the basis for saying that they were " a step in the right direction " ?

Hummy...suggesting a delay to the capital requirements increase is basically suggesting we do not need to be more careful. Considering our banks face more risk than they ever have we should feel affronted that he is attempting to tell some kind of fairy tale about why it may be better to delay capital requirement increases at a time when they are clearly needed more than ever. Again, considering his vested interests and that he is fully aware of the current risk, it is no less than disgraceful and shameless.

We are blaming him because he repeatedly denied there was a housing affordability crisis despite campaigning on the subject and then did sweet fu$k all to address the issue when in power for 9 whole years.

Carlos and Hummy, the issue here is that when you get into politics the people absolutely expect you to understand that there are long term consequences to any policies you put in place when in power. Just because you step down from that power, your foot prints remain. John Key, as with any other leader, should have fully understood that excessive immigration, and marking an economy by how the housing market is going would not be good for ordinary Kiwis living in a low wage economy. While successive Governments who do not correct flawed policies, making them culpable too, it does not absolve the instigator or any other who did nothing to change it from culpability. The blame, at least some of it rests with John Key.

Our government is put in place to serve the people. The fact that so many of our politicians are self serving and only work to feather their own nests and careers is a reflection on their integrity and character. The saddest part is that so many are lauded for their attitudes by sycophantic followers.

So true. You will never fined a finer politician than those that should never have been enroled in the first place. That some are so deeply in their debt, is tantamount to eternal stupidity. If they were fined for all the problems they cause, we would be in clover, not in Debt.

When you see any politician going large in the Banks, UN, or any large institution involved with "World Economics" shows how corrupted the entire universe has become.

In some Countries, they used to lock em up...and throw away the "key".

Now we applaud em for our grief and debt and pay them a pension for ever, and a day.

Blowing a bubble is not to be rewarded. Banks and/Orr should not be 'entitled', nor paid heaps. A scam is a scam and a fiddle while leveraging ones own financial benefit, plus pension, is a crime beyond all..............Recognition. Print and be damned is gonna bite us all in the rear view....mirror. One day when you people see the light...when the bubble bursts. Trillions caused the problem, just magnified today, by the ineptitude of those involved in the money laundering and printing and wiping their hands of it all becoming apparent, due to a pandemic and the World stops spreading the money go round as debt...hurts. The merry go round is obvious to some, when the buck stops...I certainly know who to blame....Maybe we should teach economics to 1st graders..... Cos the printing and papering the cracks with 1's and Zeros is getting beyond a joke.......Vote left or right, it is fiddle for diddle in the Middle, we have to put up with....every election....Labour is not intensive, it is Imported...for the sake of the entire fishing and layabouts benefit...go figure.
Socialism is as expensive as a National bled nation, based on the price of Houses...Copying it forever and a day and taxing those who did not owe, is tant-a-mount to stupidity. But they are. Billionaires and millionaires show you how the money was is until the end of time.. Aided and abetted and funded by Financial Policy.....a bit rich...ain't it. Get the picture.

It is on your screen every day...if ya can open your mind and eyes.

Jeez, it shouldn't have to be spelled out.

Increasing bank capital requirements was due to happen to ensure the banks had enough capital in the event of a downturn. It would have meant banks would be more resilient to a downturn in asset prices, but would also mean they would probably have to withhold/lower dividends to shareholders. So at the expense of shareholder profits, the NZ financial system would have been more resilient. It was RBNZ saying "let's be cautious".

If JK was really interested in the long term resilience of both his bank and the NZ financial system, he would welcome the increase to capital requirements. But he isn't. He is the chairman of ANZ, so works for the shareholders of ANZ. He will use as much political clout as he can to ensure those shareholders get maximum dividends. Hence he is using any/every excuse under the sun (even when they don't make sense) to ensure ANZ can maximise payments to shareholders.

blobbles..EXACTLY right. I have ANZ shares and am still affronted by his total BS

"It would have meant banks would be more resilient to a downturn in asset prices" appreciate you spelling it out and giving a hint to the reasons. So, it is about banks having funds and assets, not just made up numbers ..? And Key wants to keep adding new numbers but the assets are eroding? Then what, a taxpayer funded bailout?


Clearly you have not been here long... or have no idea what John did while in parliament.....
It's hypocrisy at its finest

Uh Oh..NZ born but do see the relevance of that or what John Key did or did not do for NZ in the past. What is important to me is that yesterday, by pushing for new capital requirements to be delayed, he was trying to sell a totally self-serving agenda while fully understanding that any delay significantly increases the chances that ANZ deposit holders suffer serious financial loss. No better than the toxic bias that continually spews from the mouths of economists paid for by the vested interests of banks, the media and the RE companies. Pond life.

Do you reckon he is suggesting people get more into hock - delaying the inevitable bust, so that more get indebted, then the banks et al pull plug, get bailouts, and then get to keep all those assets through mortgagee sales? How do deposit holders lose - is it thru asset inflation? Man, so many questions, and no answers from the likes of the smart man, John Key. Wouldn't mind understanding wtf he is on about and in plain English how it can affect Joe Blogs. They are just mofos. Seriously, NZ taxpayers pay them, for what? What benefit do they give to NZers? Just innuendos, tricks and upsets.

This is brilliant humour, thank you John Key!

OK look I've got a term deposit maturing in a couple of weeks. Obviously I'm going to throw it into the housing Ponzi before JK shuts it down. Can someone please suggest what I can get for $10k+change?

Is John Key really talking about BUBBLE.

Is he fine or something sinister to follow that he is hinting at.


John Key abruptly quit the government and fled the country. It always amazed me how so few asked why.

The affair with what the Hekia Parata. That's why.

Ha.. how long will this post survive?

Don Brash laughs himself to sleep every night.


Went to an auction today, cv 1.25M or thereabouts. Figured 1.5M maybe higher, sold just shy of 1.9M. 3 bed cross lease meadowbank. Nice features with pool etc but still fundamentals didn't stack up. Chong Kee can shove it after years of a stoking the property fires.


He's a right tosser.
Hilarious him talking up the risk of a bubble after playing a huge role in inflating it!!!

Don't buy in auckland if its 2 xpnsve up here houses are very affordable... where exactly are u looking fritz,,,,

Surely if there is increased risk of a bubble that would mean getting the new banking capital requirements in place faster rather than delaying them? If Key was writing this garbage out of ignorance it would not be so bad but.....

Yes M'Bank is in the midst of a crazy boom.

CV's are irrelevant. Lost any relevance years ago. Local authorities should review their basis of rating

Here's a thing, about these two Sirs (J/Key & R/Jones) were all sittings on heaps of $ to buy their board voice of influence - (talking about looser of hoarding cash during this pandemic economic intervention era). Yet, ANZ/JK & Zollner already uttering the same whistle.. zombie companies & bubble burst blah.. They just like those talking of DGM, economist, forecaster & RBNZ.. Nothing, there's no such things about this zombie movies & bubble pop. FHB, Investor & Banks - we always knew that such things will be prevented at any cost in NZ, buying a house is that intrinsic value thingy, for long term, peace of minds, raise family bla bla..NZ have very unique way in dealing with Cancer diagnosis; From couple of clinicians skimming quick diagnose, to the patient/system that don't want to acknowledge it - just to deal it later at advance stage, then straight to palliative care.. then time of death records. Life goes on..

So he says there's a bubble, but then says:

"If you really wanted me to be out there and bold - I would say I would encourage the Reserve Bank to extend the holiday on the capital requirements," he said.

i.e. make the bubble bigger.

This guy has the hide of a rhino. The audacity!



Says the guy who flooded NZ with immigration during his term and had 1,000 people a week flooding into Auckland and pushed the housing market skyward and out of reach of families who were
a) not willing to have one partner working - just to pay a mortgage...
b) while the other partner work for other living costs...
c) and the kids being raised by overpriced childcare while the parents worked full time to stay on top of housing and living costs

I would swear about this guy, but it won't do anything to teflon John - and simply get this comment banned
Shonkey Donkey giving us lectures about housing bubbles... what a joke...

".there's this disintermediation of the banks but does it come with a systemic risk to the system in that we get more and more regulated ironically they get less and less regulated but somewhere along the line that does not end in a happy marriage."" WTF , someone decode into English, please.

Yeah, I'm a bit of linguist but this was a toughy. In desperation I translated from JK to Japanese, then from Japanese to Punjabi, then back to English. This did seem to strip it back to it's essentials:
"There is no middleman for banks, but the irony is that there is a systemic risk to the system that the rules are becoming more and more regular, but it does not end in a happy marriage."
So, despite there being no middlemen (between RBA and banks) there is still a risk of making the finance system more regular (producing more crap), eventually leading the RBA to decide it can live without them.

You're welcome.

Sorry John, but fintech and defi are coming for you faster than you know... The disruption is well underway - get ready to become the taxi driver to the uber

House prices in NZ will not fall. Normal economics does not apply to NZ property,it is not a free market. It is the best asset class in NZ and all taxes are geared towards incentivising investors into property. I guarantee NZ national average house prices will not fall within the next 5 years.