RBNZ gauging extent of banks 'front-loading' on capital proposals

Thu, 26 Sep 2019

By Paul McBeth Sept. 26 (BusinessDesk) - Reserve Bank governor Adrian Orr says rural borrowers are facing higher lending costs despite interest rate cuts over the past year and that the regulator is gauging whether banks are bolstering their balance sheets in advance of tougher capital requirements. After a decade or so of aggressive lending to households and the dairy sector, the banks have spent the past year "revisiting this wisdom" at a time when the official cash rate was cut to a record low 1 percent, Orr said. "Over the last 1...

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