Yes, ComCom, RBNZ regulation is a problem

The very first recommendation in the Commerce Commission's draft report on its study of competition for personal banking services was that the Reserve Bank should “review its prudential capital settings to ensure they are competitively neutral and smaller players are better able to compete.”

Three other of ComCom's 16 recommendations went directly to the manner in which RBNZ is regulating.

But RBNZ rejected this out of hand, interpreting it as meaning “weaker prudential regulation or access to capital on non-commercial terms” for the smaller banks.

RBNZ published its answering submission ahead of this week's three-day conference ComCom held to air criticisms of its draft report and to clarify a number of points, but the central bank was conspicuous by its absence at this week's hearings.