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RBNZ’s bank capital policy will cost up to $2B a year

The Reserve Bank’s proposals to double minimum bank equity levels will cost New Zealand’s economy $1.5-to-$2 billion a year without making banks much safer, according to former long-serving central bank official Ian Harrison.

Worse, he says the bank’s decision to base its policy on ensuring that bank collapses occur only once in every 200 years happened at the last minute when it realised that its initial target

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