As Trump plunges Global Economy into Trade War – Slashing Reserve bank by 25% as insane as lowering capital requirements for Aussie Banks
TDB told you that Adrian Orr had resigned because f vast budget cuts by Nicola Willis and her desire to lower the amount of capital the Aussia Banks had to hold to protect Kiwis, now we see the results of those cuts…
Madness To Slash Reserve Bank Budget At A Time Of Economic Challenge – PSA
At a time of turmoil in the international economic landscape, it doesn’t make sense to kneecap one of the key agencies dedicated to helping New Zealand meet its challenges.
The Government today announced a deep 25% cut in the bank’s five-year operational funding arrangement.
“How does this fit with the Government’s economic growth agenda?” said Fleur Fitzsimons, National Secretary for the Public Service Association for Te Pūkenga Here Tikanga Mahi.
“The bank’s inflation mandate is a key tool for economic management. It fights inflation so the economy can flourish without the damaging impacts of runaway inflation.
“This will see highly skilled people lose their jobs and for what end? Once again, we are seeing the Government happy to cut people without producing the evidence that the cuts won’t impact outcomes.
“As we have seen across the public sector, this is a government happy to axe experienced people charged with doing critical long-term thinking and gathering the evidence for making good policy decisions.
“Undermining the Reserve Bank is just more short-term thinking without regard to consequences.”
…the PSA is 100% right, it is insane to make these structural cuts at a time when Trump is crashing the global economy!
It is as insane as changing the bank capital requirements of the big Aussie Banks…
Reserve Bank announces review of bank capital requirements
The Reserve Bank is reassessing how much capital banks need to hold in reserve amid criticism its policy is too tough and costly.
Board chair Neil Quigley told the Finance and Expenditure Committee inquiry into banking that an evidence-based review of capital requirements will be undertaken by international experts with a report expected by the end of this year.
He said the review will take time, and cannot be rushed.
“We cannot just decide next week we’re going to do something different,” he said, adding the current requirements took two years to set.
Finance Minister Nicola Willis said higher capital requirements increased the cost of borrowing.
“It’s important that the Reserve Bank’s prudential regime preserves the stability of our financial system, while taking care not to not impose excessive costs in the process,” she said.
“I want to see settings that preserve financial stability while encouraging investment, job creation and income growth.”
…The real question now Adrian Orr has left is will the Big Australian Banks (who were angry at his demands for their capital levels) get a stooge who will lower their capital requirements?
Orr was hated by the 4 Big Australian Banks because he was the one demanding they hold high enough capital levels to look after New Zealanders because Orr knew in his heart of hearts that if a serious economic shock hit Australia or NZ that the 4 Big Aussie Banks would immediately cut our throat to protect their own.
No Kiwi can be stupid enough to not expect the 4 Big Aussie Banks who have robbed us blind to cut our throats if they needed to.
That was what Orr was protecting us from, he has been forced out and now we wait to see if the 4 Big Aussie Banks get their stooge.
Under this Government it is impossible to see that they won’t.
Here’s the risk.
Free Market Nicola will decide the Banks can have way less capital just as Trump primes the economy for global collapse, Orr’s worst fears will be realised and as Trump’s global realignment hits us, the Aussie Banks will gut us and run.
I don’t think we will wait long to find out.
National are replacing our watchdogs with Gimps!
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Nice. Bob the First got a couple of personal renderings posted on a blog, no doubt he will be flogging the log… though more likely a twig.
‘Oceania was at war with Eastasia. Oceania had always been at war with Eastasia.’ George Orwell
1984 was supposed to be a warning, not a plan of action.
From Al Jazeera 16 Apr 2025
As US and China escalate trade war, the world asks, ‘Who will blink first?’
US President Donald Trump says ball is in China’s court, but analysts say Beijing is prepared to withstand trade war.
By Megha Bahree
https://www.aljazeera.com/economy/2025/4/16/as-us-and-china-escalate-trade-war-the-world-asks-who-will-blink-first
….Trump has pummelled China with a 145-percent tariff. Beijing has retaliated with a duty of 125 percent…..
“A 145-percent tariff will make it impossible for China to sell to the US – the costs on both economies will be exceptionally high,” Vina Nadjibulla, vice president of research and strategy at the Asia Pacific Foundation of Canada, told Al Jazeera.
“Who will blink first depends on who can stand more pain and who is better prepared,” she added.
By ‘stand more pain’ What Vina Nadjibulla words mean reality, is which country can stand more internal repression, America or China?
The thing we have to be worried about is that Nicola Willis is no economist,she’s no finance minister either (as is proved daily with her handling of questions from Barbara Edmonds). So who is actually running the finance portfolio.
And all of that is a good thing. All the experienced banksters have done nothing but cause further economic chaos. Putting regular people who understand basic things like balancing a household budget is exactly what we need right now.
That July $100,000 protection level for kiwi depositers looks a long way off. ( he says nervously )