US interest rates rose above New Zealand interest rates for the first time as house prices continued to rise here. Winston Peters led the Government in Parliament and is set to become acting Prime Minister. Labour's political vulnerability over justice and corrections issues was exposed. The Public Service staged a "manny-go-round." Shane Jones triggered a debate about Fonterra's future by attacking its performance and chairman. Trump got played by Kim Jong Un, but it may not matter.
Regional Economic Development Minister Shane Jones accused Fonterra of being disconnected from farmers and called on Chairman John Wilson to resign. The US Federal Reserve raised its key cash rate to around 2.0 percent and signaled two more hikes this year. This if the first time New Zealand's OCR has been below America's official rate.
The Government launched reviews of employment law and climate change law aimed at soothing the nerves of employers and farmers respectively. It appeared to rule out a breakup of the Reserve Bank and started considering introducing a deposit insurance scheme. Better foreign ownership data showed almost 20 percent of property buyers in central Auckland in the last year were not citizens. Documents showed officials advised the Government against its decision to stop issuing new offshore oil and gas drilling licenses, saying it would actually increase emissions because coal would be used instead of gas. The economy may have slowed a bit in the March quarter as construction sector activity and confidence continues to wane. Donald Trump waged trade wars ahead of G7 meetings and his summit with Kim Jong Un.
New Zealand may finally implement deposit protection as part of a review of the Reserve Bank.
The Reserve Bank of New Zealand withdrew from a scheduled liquidation hearing involving CBL Insurance slated to take place this week and has requested that the interim liquidation continue.
The 8 things that mattered this week included big Government decisions on mycoplasma bovis and methamphetamine contamination of houses, the return of Heather 'H2' Simpson to oversee a major and potentially problematic health sector review, fresh criticism of New Zealand as the 'soft-underbelly' of the Five Eyes security alliance, Rob Everett's warning to banks operating at the 'edge of the law', the Law Society's mea culpa in the wake of the #metoo moment at Russell McVeagh, the frustrating weakness in business confidence and the latest turmoil around Donald Trump's trade wars and the eurozone debt crisis.
Are there fewer complaints about our financial services sector than in Australia because the culture of banks and insurers here is better, or is it because customers are "just losing the will to live?".
The Reserve Bank is warning banks to be "far more prudent" about lending to dairy farmers, but says it doesn't see mycoplasma bovis as a threat to financial stability.
A gut feeling that banks may not have learned their lesson around prudent lending is holding Reserve Bank governor Adrian Orr back from easing loan to value restrictions, Lynn Grieveson reports.
New Zealand's central bank and Financial Markets Authority so far haven't seen any evidence of "systemic and widespread" misconduct in a review of New Zealand banks, FMA chief executive Rob Everett told parliament's Finance and Expenditures select committee.