Poppycock and scaremongering to justify the unjustifiable

Sources: Pixabay

The New Zealand Bankers Association is claiming that if the law isn’t changed retrospectively, it could cost the NZ banking system $12.9 billion or more.

To back up this alarmist claim, the NZBA provided a summary of Reserve Bank modelling and advice released under the Official Information Act which had been provided to the commerce minister in October last year.

The summary provided contains a number of redactions, so as well as it being just a summary, it’s impossible to work out exactly how RBNZ arrived at this figure.

What we can see is RBNZ arrived at three different scenarios that could cost banks anything from $0.1 billion to $ 4.5 billion to the $12.9 billion figure NZBA headlined.

The summary concluded with the alarming statement that “we considered the impact of more extreme variations on these sensitivities.