Reserve Bank Governor Adrian Orr seems to have solid support for his battle with the Aussie banks among business leaders.
The Mood of the Boardroom survey found more than 43 per cent of respondents saw the Reserve Bank's proposed capital ratio increase as a sound move to protect the New Zealand financial system.
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More than half of respondents say the bank bosses have been scaremongering on the issue.
The Reserve Bank is proposing a lift in the amount of risk-weighted capital retail banks hold, from 8.5 per cent to 16 per cent.
The increase is designed to make banks safer and better designed to handle periods of financial stress by holding enough capital to reduce the probability of a financial crisis in New Zealand to a one in 200-year event.
But Australian bank bosses have pushed back, calling it overly conservative and warning that it could limit the availability of credit in some sectors of the economy and increase interest costs for borrowers.
Westpac, for example, has argued the proposals "go significantly further than is required" and go "well beyond international norms".
It has warned that the changes could add 1 per cent to mortgage rates.
Just 17 per cent of business leaders believe the increase will really be a major impost on bank shareholders, with nearly 35 per cent saying they will be affordable given the level of banking profits.
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ANZ group chief executive Shayne Elliott has threatened to review the "size, nature and operations" of the New Zealand business if the Reserve Bank implements its proposed changes to capital ratios, according to his submission released publicly yesterday.
The capital changes would see ANZ Group reduce investment and reallocate resources away from New Zealand to more profitable businesses, Elliott says in the ANZ's formal submission. "This may also lead the New Zealand business to reduce operational costs (including employee costs)."
But most local business leaders don't really believe him it seems.
Just 25 per cent per cent of respondents believe the increases will result in Australian banks reducing operations in New Zealand.
And more than 55 per cent said they thought bank chief executives were scaremongering when they threatened to pull back on New Zealand operations.
However, a larger percentage (58 per cent) accepted that the increased capital requirements could result in the banks reducing their exposure in certain sectors such as dairying and small-business lending.
Orr has also been quite vocal in his defence of the moves making headlines in financial media across the across the Tasman when he suggested the big banks operate here as a matter of privilege rather than a matter of right.
He has pointed out that our banking sector is the most profitable in the world.
Where the previous Governor Graeme Wheeler was often criticised for a lack of communication, Orr's tendency to say exactly what he thinks seems to worry some commentators.
Orr has also been outspoken in defence of the Reserve Bank's monetary policy moves.
In the wake of a bold 50 basis point rate cut in August, he went on the offensive arguing that now was the time for businesses to invest more, consumers to spend more and that savers should look at alternatives to low-yielding bank deposits.
Unfortunately business leaders don't seem to have taken those words to heart.
Nearly 77 per cent said the OCR cuts had not increased their company's appetite to invest in new projects. Just 13 per cent said they would now be more likely to invest.
Orr has also warned that New Zealand interest rates could head into negative territory — following nations like Denmark and Switzerland — although that is not yet in the Reserve Bank's forecasts.
Orr has said he is "completely open" to the possibility of negative rates or unconventional tools like quantitative easing.
He says he sees no reason why monetary policy can't remain effective as rates fall.
"Zero is no magic number," he told the Herald in August.
Technically that may be the case, but business leaders are considerably less relaxed about the prospects of negative interest rates or QE.
Nearly 75 per cent said the prospect of these things was a cause for concern.
Regardless of whether monetary policy can remain effective at these levels, business leaders are no doubt well aware that the business conditions required to get there would inevitably be very ugly.
Orr has also made the case for increased government spending on infrastructure to assist in boosting economic growth.
That's not something we've heard from a New Zealand Reserve Bank Governor before — although Australia's Governor Philip Lowe has also made calls for more Federal spending.
A majority of business leaders were comfortable with Orr's call, perhaps reflecting broadly strong support from the business community for more government focus on infrastructure including, roads of national significance.
Nearly 54 per cent said they felt Orr had not overstepped the mark with his call, although nearly 30 per cent felt he had.
Orr is clearly the most outspoken and therefore the most controversial Reserve Bank Governor New Zealand has seen.
With monetary policy facing such unusual times and the Reserve Bank's regulatory role becoming increasingly central to our financial system, he looks set to go on dividing opinion for a while yet.
● Liam Dann is the Herald's business editor at large