Kiwibank’s ability to lend money is highly constrained by inadequate capital to expand further while staying within capital adequacy ratios.
The only way a bank can cram money down people’s throat is to lend at a rate below others. Even then, any spike in demand from this underpricing will quickly exhaust spare capital reserves.
Former UK Labour MP (and academic administrator) Bryan Gould, and former Reserve Bank Governor (and political leader) Don Brash have been engaged in a fairly robust exchange of views in the op-ed pages of the Herald.
Gould began it a couple of weeks ago with a column, initially prompted by some combination of the initiatives from both the Minister of Finance, and the Labour Party, that may lead to governance reforms at the Reserve Bank, and Sonny Bill Williams’ Islam-inspired objections to interest, and hence to sponsorship by the BNZ. The politicians being not very radical at all, Gould pointed us to Williams.
Sonny Bill, however, has succeeded, if we are thoughtful enough to recognise it, in throwing a spotlight on the entire role of the banks in our economy and our society.
Gould’s specific concern?
It is the willingness, not to say keenness, of the banks to lend on mortgage that…
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Utopia, you are standing in it! 
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