Originally Posted by
macduffy
We can criticise the banks for resisting calls from the RBNZ for increased capital requirements but would do well to remember that the resultant numbers are calculated based on individual banks' lending. Tougher, higher capital levels will inevitably cause banks to be more restrictive in their approval of loans; more risk-averse; more selective in allocating funds to the safer, more profitable business. The days of readily available bank loans may be drawing to a close.