Banks are offering sneaky deeply discounted home loan rates ostensibly via ‘mortgage brokers’ - but now the cat is out of the bag every man and his dog is asking for them. This makes a mockery of the Reserve Bank and its attempts to tighten. What is extra sneaky is that the retail banks were making out that they were complying, while thumbing their nose at the Governor via these heavily discounted rates. Added to this, the banks Term Deposit and On-Call Savings rates are nowhere near as attractive as they should be, resulting in the Reserve Bank having to call them out on this as well. It seems that retail banks have clear ideas as to where Kiwi’s should be putting their money, and residential property is still the place they are to be herded towards. Ultimately it may be that banks need more regulation to get them to comply with the overall thrust of monetary policy. Needless to say, they are a very important part of the financial system but seem to want to ‘go rogue’ while maintaining a veneer of compliance with the Reserve Bank.