Finance spokesperson Nicola Willis has written to the committee asking for what she said would be a “short, sharp enquiry” into any potential competition issues in New Zealand’s retail banking sector.
“New Zealanders enduring a prolonged cost of living crisis will have been concerned to hear the Reserve Bank join a chorus of voices casting doubt on the competitiveness of the retail banking market,” Willis said.
There have been several calls for a full market study by the Commerce Commission into banking competitiveness.
These have come from the Simplicity chief executive Sam Stubbs as well as the founder of 2 Degrees, and now anti-monopoly campaigner, Tex Edwards.
But Willis said a select committee enquiry would be a better way to go.
“A formal Commerce Commission market study would take a long time and be extremely resource-intensive, creating a lucrative opportunity for lawyers and consultants,” she said.
“But it would be highly unlikely to give New Zealanders any immediate answers to what are urgent questions.
“New Zealand bank customers deserve answers to questions about the adequacy of competition in our retail banking sector, why increases in interest rate rises for deposits have lagged rate rises for lending, and what the impact is of new regulations imposed by the Government.”
She said the terms of reference for the Select Committee enquiry should be narrow in scope and the hearing of evidence should be limited to a narrow group of stakeholders.
Afterwards, the Select Committee could then make recommendations to the Government about any next steps that may be warranted, including whether it sees merit in a market study.
Meanwhile, the Bankers Association supports the call.
“Our banks operate in a competitive market. The industry would welcome the opportunity to discuss bank profits and the contribution banks make to support the New Zealand economy, households and businesses,” NZ Banking Association chief executive Roger Beaumont said.
“There’s also legislation in the pipeline to help people safely share their banking information with other service providers, which will support even more competition,” Beaumont said.
“The banking industry has been working with the government on this for some time to help ensure the best outcomes for consumers.”
