Maybe the most common oversight in the emotional arguments about foreign ownership and the apparently dreadful process of all “those profits” made from New Zealanders flowing out and away lies in the failure to recognise that risk is flowing away too.
It is the overseas owners who are bearing all that New Zealand generated risk.
We repatriate risk just as we repatriate profits. Australian shareholders bear the risk of running trading banks in NZ. The impact of a heap of defaults comes to rest at the feet of Australian investors.
In a generally competitive market risk ends up being born by those who are best at bearing a given type of risk – so risks kiwis are not good at managing flow offshore as well as profits to be made by taking them.
Again with banks – NZ can bear some banking risks… that is why TSB and Co op Bank and in some areas Kiwibank can operate as successfully as they do. But there is a scale and scope at which it makes more sense to enjoy the customer and depositor benefits here in NZ while exporting the risk and profit.