Singapore-based economists say banks are exaggerating the impact of higher capital

Fri, 26 Jul 2019

By Jenny Ruth July 26 (BusinessDesk) - The Australian-owned banks in New Zealand are exaggerating the likely impact of the Reserve Bank’s bank capital proposals, according to Singapore-based economists Ben Udy and Marcel Thieliant. “The RBNZ anticipates only a minor impact on bank lending rates. In contrast, modelling by the banks indicates that the increase in capital would be equivalent to 50-100 basis points of interest rate hikes,” the economists at Capital Economics say in a note. “What’s more, a number of the Australian parent ba...

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