PREFU: Robertson defends $11b cost for ‘functional’ banking system

Wed, 16 Sep 2020

An avoidable $11 billion in interest costs is the price the government is paying to maintain a functioning, liquid banking system, says Finance Minister Grant Robertson.He was commenting on the cost of requiring the Reserve Bank of New Zealand to run its Large Scale Asset Purchase programme through the so-called ‘secondary’ markets.The Treasury’s pre-election economic and fiscal update, published today, outlines how this forces the RBNZ to pay higher interest rates than if it simply bought government-issued bonds directly from...

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