Fattening bank margins at odds with RBNZ's low rate policy

Deputy Reserve Bank governor Geoff Bascand says bank margins have returned to their long-run levels.

Thu, 06 May 2021

Fattening bank margins suggest the Reserve Bank's measures to keep interest rates low have stopped working.The reason why the Reserve Bank of New Zealand is both printing money and offering to lend banks money at very low interest rates is to keep interest rates low.These two programmes are huge: RBNZ has set a limit on money printing via buying bonds, the large-scale asset purchase programme (LSAP), of $100 billion and had spent $51.92b as of Wednesday, and the funding-for-lending programme (FLP), offering to lend banks three-year money fi...

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