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interestrateripoff

N.z. Policy Pioneer Wheeler Set To Raise Rates In ’14

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http://www.bloomberg.com/news/2013-09-25/new-zealand-policy-pioneer-wheeler-poised-to-raise-rates-in-14.html

Graeme Wheeler in his first year as New Zealand’s central bank chief pioneered the use of loan curbs to contain asset prices -- eschewing higher interest rates. In his second, he’s poised to raise rates anyway.

Wheeler is spurring an evolution at the Reserve Bank of New Zealand, becoming the first governor to use lending restrictions and forming a governor’s committee to advise on decisions. To help the economy withstand a strong currency, he also made the authority’s first publicly confirmed intervention in the foreign-exchange market since 2007.

..

The current governor increased the amount of capital banks must have on their balance sheet to offset riskier loans. In August, Wheeler also said that loans for more than 80 percent of a property’s value must account for no more than 10 percent of a bank’s new lending, down from about 30 percent. The limit was more aggressive than the 15 percent anticipated by banks.

It appears that only person in NZ sets the rate and it's him.

I wonder if the use of bank balance sheet tool would have curbed house price increases in the UK?

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Individual responsibility is always going to achieve more than collective responsibility (as in MPC) where no individual is accountable.

The old groupthink thing...I dont want to rock the boat, my peers might laugh at me and I couldnt take that kind of rejection...

They really are overgrown, overrated, overpaid children at the end of the day.

Edited by Executive Sadman

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