At the time of her proposal, Willis said access to credit had become harder, rising mortgage rates were hurting mortgage holders, and yet bank profitability was high.
“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 the impact of new regulations imposed by the Government,” Willis said.
The New Zealand Banking Association’s chief executive Roger Beaumont responded to Willis’ call, saying in a statement: “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,” Beaumont said at the time.
Willis previously denounced a formal Commerce Commission market study as it would “take a long time and be extremely resource-intensive”.
“[It could create] a lucrative opportunity for lawyers and consultants, but highly unlikely to give New Zealanders any immediate answers to what are urgent questions,” Willis said.
Reserve Bank chief economist Paul Conway said a market study into banking competition could be warranted.
However, he said the Reserve Bank lacked the data required to definitively comment on whether companies were contributing towards inflation by price gouging.
Last year, then Prime Minister Jacinda Ardern called on banks amid a cost-of-living crisis to assess their “social licence to operate”.
“Are they demonstrating social licence and commitment to the communities by taking the profits that they are?” Ardern questioned.
