Reduce bank capital target and move slowly, says Harbour

Tue, 23 Apr 2019

By Jenny Ruth April 24 (BusinessDesk) - Harbour Asset Management is calling for the Reserve Bank to lower its target for bank capital and to phase the new regime in over at least 10 years while allowing for at least one pause to take stock of the actual impact. The likely economic costs and increases in interest rates will be larger than the Reserve Bank’s 20-40 basis point estimate, and a 50-70 basis point increase is more likely, Harbour says. A 50 basis point increase in the annual interest cost of a $500,000 mortgage is about $2,50...

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