Kiwibank should listen to Bollard

Tuesday, November 8th 2005, 12:52AM 2 Comments

Everyone has had something to say on Alan Bollard's recent speeches - but here is a new angle.

First up, it has been a common criticism over the years that the OCR and the Policy Targets Agreement the Reserve Bank has to run the economy are pretty crude.

Well it seems like things have gotten even crudier - besides the OCR club there is now the guv's jawbone. Hardly inspiring stuff for managing a modern economy.

I doubt anyone is going to curb their spending just because Bollard has asked them to. The other crazy thing is that all the OCR increases do is push up the floating rate home loan rates, yet no one is borrowing money on variable rates - it's mainly fixed rate lending in the country and has been for some time.

As others as noted his speeches sound a little like panic.

Bollard's comments about the Australian-owned banks, their alleged profiteering and their cheap home loans have missed out one important point.

The bank which has been arguably the most aggressive in terms of pricing has been none other than the government-owned Kiwibank.
Within Good Returns we have the most comprehensive and user-friendly home loan rate available to the public. Within the section you can compare historical rates from lending organisations and plot graphs.

The following two demonstrate that over the past couple of months Kiwibank has been the most aggressive in terms of pricing.

You can compare rates at Good Returns here

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Comments from our readers

On 26 November 2005 at 1:10 am Daz said:

It's a valid point about Kiwibank, why o why did we( nz gvt) sell our interest in NZ owned banks in the first place?

Surely part of an appox $2b profit annually would have been more useful GDP wise in NZ??

And what has the effect of the lastest interest rate rise?....more eurobond issues to satisfy the nz fixed rate mortg market, higher int rate for exporters/manufacturing not to mention the exchange rate!

On 30 November 2005 at 4:32 am Jens Meder said:

Cheer up, Daz, for recognising past failures is valuable knowledge for better ways into the future. Instead of mourning over spilt milk, why not call energetically for a higher capital (NZ Super Fund) accumulation rate to take over foreign financed mortgages and satisfy the demand for them until saturated, after which there is bound to be enough capital available for other investments and even export, for NZ To become a proper economic (mini)tiger in economic growth acceleration, and also eliminate its own internal pockets of poverty! If you cannot believe in that, come up with substantiated counterarguments or better solutions, so we all become more enlightened on the team effort we need to catch up and compete with Australia!

Jens.