Distrubing gap in knowledge at the Bank.
From a post a couple of weeks ago, just after the release of the Reserve Bank’s Financial Stability Report.
In a similar vein, I noted a story on Newsroom this morning, reporting the Governor’s appearance at the Finance and Expenditure Committee yesterday. He was reported thus
But he told the select committee he would much rather the Reserve Bank, as banking regulator, could trust banks and borrowers to be prudent.
“I would love to not have to be active in that space. If banks had true long-term horizons, if the consumers were fully aware and myopia didn’t exist across borrowers, all the different foibles that people have, then you wouldn’t need the regulatory imposts.”
Talk about “nanny state” – the Governor wishes he could trust us. I wish we could trust him and his colleagues.
But, more specifically, the Governor here asserts again that banks are too short-term in their…
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