Let's rethink bank capital rules to build NZ's prosperity

Let's rethink bank capital rules to build NZ's prosperity
Bank lending rules are skewed to favour residential housing over other investments. (Image: Getty)
Carl Blanchard
To help build prosperity in New Zealand I believe there's a case for improving capital allocation or, in other words, putting money to work in the most productive assets. By doing this, we have the opportunity to lower the cost of capital and build a more productive economy offering higher wages. For now, capital is often allocated to low or non-productive assets, such as residential property. This reduces the potential of the economy and, therefore, wage growth. What can we do to change the dial?There are ways NZ’s ban...

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