Photo: RNZ
An expert in bank capital says a Parliamentary committee has lost focus on questioning the big banks about excess profits.
Victoria University's Martien Lubberink says the committee has allowed the banks to turn the conversation to easing their capital requirements.
The Reserve Bank appeared before the Finance and Expenditure committee's inquiry on Monday and said it will review the criteria, which were championed by former Governor Adrian Orr, who resigned suddenly last month, without explanation and with three years left on his term.
The incoming rules would lead to the amount of capital banks had to hold in reserve to counter major shocks gradually increase between now and 2028.
The big four Australian banks, who have also appeared before the inquiry have been lobbying over the capital standards.
Higher capital requirements force banks to use a higher level of their own equity in lending - limiting leverage.
The banks, and others, have emphasised the impact of this on the cost of lending to businesses.
Associate Professor Martien Lubberink worked for the central bank of the Netherlands and contributed to the development of new regulatory capital standards for banks worldwide and in Europe in different roles.
