The TJ Perenara of banks?
The Reserve Bank Of New Zealand. Who the hell are they?
Their name suggests that they are the TJ Perenara of Halfbacks in New Zealand. Ready to step in off the bench if ya Westpacs, ASB’s, ANZ’s, Kiwibanks, BNZ’s, Heartlands all get injured.
?Although they do provide these banks with some support when things get dicey, they are also in charge of monitoring and supervising the registered banks.
?A central bank (or the Reserve Bank) is there to protect the value of money, keep the system running, keep prices stable and ensure money is flowing through the economy.
?They have a number of ways to do this and the one we will look at soon will be the ‘Official Cash Rate’.
?The RBNZ ‘was established in 1934, and although not a government department, has been wholly owned by the government of New Zealand since 1936’.
?Gee, that's confusing, so our government owns a bank too? They’ve got a bit on.
?Maybe that’s how they could ‘print or create’ all of that money during the 2020 lock down to pay out as wage subsidies.
Well, what do they do?
The Reserve Bank is required to ensure that, throughout the economy, money works as well as possible as a mechanism for making transactions, storing value, and keeping account - RBNZ.
I read through their briefing to the Finance Minister & was going to note down some of the points but I know I’ll lose you. You just don’t need that in the week you’ve had...let's go plain English.
?You and I bank with the commercial banks who want to make a profit out of us for their shareholders. The reserve bank lends these dudes some money and somewhat controls the interest rates we pay (on debt) and receive (on deposits).?
?This is meant to keep the system stable and ensure a prosperous nation. The Reserve Bank?are busy tackling problems like unemployment, inflation, innovation & productivity in our economy via money related levers they can pull - such as deciding how much money is actually in supply; yes it can change.
?They are independent from the government but the government owns them. Doesn’t make much sense, does it? But I didn’t set it up in 1934, so don’t put that on me.?
?Adrian Orr is running the show at the moment: he is the Governor of the Reserve Bank of New Zealand. If you want this job?Jade, you basically have to study heaps of economics. He studied at the hearty University of Waikato which shows you don’t need to go to a poncy Auckland Uni to get the top jobs (hey come on Aucklanders, relax, just having you on).
?At this stage, I assume you are so fascinated with the Reserve Bank of NZ that you’ll be sending them love letters this afternoon asking if they’ll increase the supply of money to your bank account - unfortunately they won’t do that for you.
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?If you are intrigued, (I know you aren’t) you can check out their hot pink website here:?https://www.rbnz.govt.nz
If anyone is interested, I will be hosting a tour of The Reserve Bank Museum when we get back to Level 1 (I am joking, I think). But legit there is a museum.
?During the week, I sat down with Mikey to go through some common questions I get asked about crypto currencies. I am not an expert in this field or suggesting you should buy it, but I am happy to share my experiences with it. You can listen to that on any podcast platform or watch the video on youtube:?https://www.youtube.com/watch?v=voBOzqWCwP8
?Pray for Level 3,
Luke
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Did you know:? 73%?of Kiwis received a pay increase of less than inflation last year according to the Labour Cost Index. I.e. the pay increase was less than the rise in the cost of goods you buy.
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