Eyes Wide Shut: Did Bank Capital Grow under RBNZ’s Governor Orr?

And what does it mean for one bank in particular? Last week, audit firm KPMG published its quarterly Financial Institutions Performance Survey (or FIPS). It featured the deteriorating profitability of New Zealand’s banks. Bad news of course, and the New Zealand financial press quickly jumped on the survey. Radio New Zealand printed a headline sporting… Read More Eyes Wide Shut: Did Bank Capital Grow under RBNZ’s Governor Orr?

The wisdom of crowds

The idea that financial markets are efficient is fascinating. A compelling story about market efficiency is the one about the Space Shuttle Challenger disaster. The Challenger broke apart within minutes after its launch on 28 January 1986. I remember it very well. It was a cold day, I was in Groningen, the Netherlands. I cycled back home… Read More The wisdom of crowds

Free rider problems and tax bills? The Kiwibank capital cock-up

On 15 March, New Zealand Kiwibank issued two odd statements regarding their Basel III compliant (or is it compliant) capital instruments. The announcements raised the prospect of disqualification of two capital instruments: the Tier 2 convertible subordinated bond issued on 6 June 2014 (Tier 2 Bond); and the Additional Tier 1 perpetual bond issued on 27 May… Read More Free rider problems and tax bills? The Kiwibank capital cock-up