So, what to make of the Governor’s final decisions on bank capital?
If you are a bank or bank shareholder, you are presumably just grateful for small mercies, the modest extent to which the Governor changed his mind and allowed the banks to use cheaper forms of capital to meet the new requirements. Consistent with that, the share prices of the parent banks recovered some ground yesterday.
Since banks are scared of their regulators and – both here and in Australia – are very reluctant to seek judicial review, despite the very strong sense of pre-determination about this process, and the evident failure to engage seriously with substantive concerns raised by submitters, there isn’t much else they can do. Their behaviour – willingness to provide credit into this economy – can, and probably will, adjust. But if they won’t, or can’t, do anything more about the policy decision, grizzling…
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Utopia, you are standing in it! 
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