A loan which could be approved in 60 mins now takes 7 days thanks to regulations
The smaller banks continue to complain that they have to apply more capital to essentially equivalent loans than the big four banks – while the four majors are able to use their own internal models to calculate capital requirements, the other banks have to use much more conservative standardised models.
“The most striking example mentioned by the smaller banks was the different capital requirements for a big four bank when lending the same loan to the same family, for the same house, in the same street simply because they were permitted to use different models to calculate the capital required.”
RBNZ’s changes to capital requirements have gone some way towards addressing those concerns.
Participants also perceived the RBNZ is running behind on implementing the Deposit Takers Act and the associated deposit insurance scheme which is due to come into effect from July 1.
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