RBNZ set to pay banks $3.3b in interest on $53b-plus on cash balances in RBNZ settlement accounts; Robertson looked at cutting interest paid as type of bank tax; RBNZ & Treasury said no
Do you think the old man shouting to the clouds about Local Government and Auckland councillors deliberately held the vote on leaving Local Government NZ last Thursday - just before Posie Parker arrived in NZ - knowing media coverage of the pull-out would be subsumed by coverage of her (aborted) rally?
And yes, as the other David says, you should open this up.
That inflation-benefits chart reminded me of https://wtfhappenedin1971.com/ (Disclaimer: statistics (LDLaS); Bonus disclaimer: maybe run by Bitcoin and gold-standard enthusiasts)
Mar 26, 2023·edited Mar 26, 2023Liked by Bernard Hickey
I'd have to agree with Treasury/RBNZ on this one. Artificially skewing the interest rates for banks away from the OCR overcomplicates things and creates an unnecessary schism.
If Government wants to tax/rein in bank profits, they should go about it in a more direct, transparent manner
The current financial/monetary system in New Zealand is diabolical !!! Justice and morality require that the expansion/increase of the money supply in NZ must be by the NZ government only and they would loan to banks and others as required. The flow of money into and out of New Zealand would need to be carefully and thoroughly controlled.
Hi Bernard I liked your comment about corporate welfare and whether National or Act would be screaming from the roof tops how ever they are likely to say without the help this would impact on business and jobs. Yeah right.
This reminds me of Covid where Corporations were paid substantial dollars to keep workers employed where in fact some of them used the subsidies to increase the dividends to their shareholders. I don’t recall neither National nor ACT complaining about payment of the subsidies but I do recall the Auditor - General commenting on how the subsidies were implemented.
Excellent Bernard. Right down to the nitty gritty of why NZers have to suffer.Some more than others. Very deceptive and undemocratic and certainly not in our country or peoples best interests. It’s almost treasonous so no wonder they’ve taken that off the books. Far better our public funding facilities goes to the people than offshore banks.
When will you understand that raising interest rates is NOT going to effect inflation. Any hint of more raises should be strongly attacked, not withstanding whatever RBNZ does about IOR.
Wasn't this QE bond buying spree about fear during the first phase of Covid? Businesses were shuttered, would be drawing down their accounts in order to pay their bills. People would be drawing down their accounts in order to pay their bills. Nobody knew how far this would go, so inject a bunch of cash into the banks to provide liquidity.
This is exactly where SVB fell apart in one week. They had govt bonds and needed cash. No cash was to be had. Oops, gotta close the doors.
You pump out money so this doesn't happen. See: Fed discount window lending goes from $5B to $150B in a week. Perhaps it wasn't necessary in NZ to make the moves that were made. idk. We get the benefit of hindsight.
Firstly, if the earnings on these reserves are cut to zero, the banks will just buy governance paper instead (these reserves count towards their liquidity ratios). This would drive down interest rates and work at odds to the RBNZs desired direction.
Secondly, if we don’t want the government spending money on interest expense, that paid to the banks is a triviality compared to the overall bill and the real crime is using interest rates as the tool to crush the economy rather than directly restricting private money creation in the commercial banking system through RBNZ directive.
yes you should open this up ...
Do you think the old man shouting to the clouds about Local Government and Auckland councillors deliberately held the vote on leaving Local Government NZ last Thursday - just before Posie Parker arrived in NZ - knowing media coverage of the pull-out would be subsumed by coverage of her (aborted) rally?
And yes, as the other David says, you should open this up.
That inflation-benefits chart reminded me of https://wtfhappenedin1971.com/ (Disclaimer: statistics (LDLaS); Bonus disclaimer: maybe run by Bitcoin and gold-standard enthusiasts)
I'm starting to think the entire banking system is corrupt.
I'd have to agree with Treasury/RBNZ on this one. Artificially skewing the interest rates for banks away from the OCR overcomplicates things and creates an unnecessary schism.
If Government wants to tax/rein in bank profits, they should go about it in a more direct, transparent manner
release please Bernard.
Patrick Medlicott
Happy to open this up. The more people who understand rorts like this, the better.
Issues like this deserve an independently moderated cross party discussion and resolution, in my opinion. Any precedents for that?
Open this up Bernard
I've opened that up for reading, listening and sharing in public now.
The current financial/monetary system in New Zealand is diabolical !!! Justice and morality require that the expansion/increase of the money supply in NZ must be by the NZ government only and they would loan to banks and others as required. The flow of money into and out of New Zealand would need to be carefully and thoroughly controlled.
Gary Dyall
Hi Bernard I liked your comment about corporate welfare and whether National or Act would be screaming from the roof tops how ever they are likely to say without the help this would impact on business and jobs. Yeah right.
This reminds me of Covid where Corporations were paid substantial dollars to keep workers employed where in fact some of them used the subsidies to increase the dividends to their shareholders. I don’t recall neither National nor ACT complaining about payment of the subsidies but I do recall the Auditor - General commenting on how the subsidies were implemented.
Excellent Bernard. Right down to the nitty gritty of why NZers have to suffer.Some more than others. Very deceptive and undemocratic and certainly not in our country or peoples best interests. It’s almost treasonous so no wonder they’ve taken that off the books. Far better our public funding facilities goes to the people than offshore banks.
When will you understand that raising interest rates is NOT going to effect inflation. Any hint of more raises should be strongly attacked, not withstanding whatever RBNZ does about IOR.
Wasn't this QE bond buying spree about fear during the first phase of Covid? Businesses were shuttered, would be drawing down their accounts in order to pay their bills. People would be drawing down their accounts in order to pay their bills. Nobody knew how far this would go, so inject a bunch of cash into the banks to provide liquidity.
This is exactly where SVB fell apart in one week. They had govt bonds and needed cash. No cash was to be had. Oops, gotta close the doors.
You pump out money so this doesn't happen. See: Fed discount window lending goes from $5B to $150B in a week. Perhaps it wasn't necessary in NZ to make the moves that were made. idk. We get the benefit of hindsight.
Another good piece BH, but a few challenges.
Firstly, if the earnings on these reserves are cut to zero, the banks will just buy governance paper instead (these reserves count towards their liquidity ratios). This would drive down interest rates and work at odds to the RBNZs desired direction.
Secondly, if we don’t want the government spending money on interest expense, that paid to the banks is a triviality compared to the overall bill and the real crime is using interest rates as the tool to crush the economy rather than directly restricting private money creation in the commercial banking system through RBNZ directive.
Well that was a bleak listen, thanks for opening this one up Bernard