Tuesday, May 5, 2009

A dull little misunderstanding

Today scrapping about the apparently rapacious Australian banks NZ offshoots (most of the NZ banking sector) charging more for home loans than their Aus counterparts in spite of the Australian OCR being higher than ours….. i.e. how to miss completely the ideas that:

  • risk in Australia is different to risk in N.Z
  • much lending is done through wholesale markets lending into the respective countries (same point in the end, and,
  • the mix of fixed versus floating creates quite different reinvestment and funding risks

Instead commentators who should know better pushed along by a media bouncing off the walls through  swine flu driven highs grounded in the “law of micro calamity” figure its cross Tasman greed.

Typically our failure to recognise risk as a fundamental life force continues.

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