Of bank checks and dipsticks

The most extraordinary thing about a Dom-Post report headed PM runs bank ‘health check’ is that the writer found anything remarkable in the PM checking the health of the banks.

Press Gallery scribe Vernon Small almost breathlessly says

the Prime Minister has taken the extraordinary step of seeking personal assurances from the big four Australian-owned banks that they are healthy and will be fair to consumers.

John Key revealed yesterday that he met the head of ANZ-National on Thursday in the Beehive and visited Westpac, ASB and BNZ in Auckland on Friday.

In what he described as “a bit of health check”, he asked, in essence, if they were still able to borrow and lend enough.

Lord only knows why this should be extraordinary.

Why not call this a refreshingly innovative step? Or an admirably front-on approach to dealing with bankers?

Why describe things as “extraordinary” in tones that imply he has gone beyond the beyond?

Alf says well done, Boss, for bowling along to the banks and finding out they are

in better shape than banks in the United States and Europe. But they had experienced a “dramatic” drop in demand for borrowing from businesses and households as the recession took hold.

“They have expressed a strong willingness to lend and confidence that they can raise money. . . obviously there has to be a degree of caution in the kinds of economic circumstances we all face. But as a general rule they are happy to lend but they are seeing a big reduction in demand themselves.”

As Vernon Small acknowledges,

He [the PM] defended his decision to talk directly to the bank chief executives, who had also been invited to his jobs summit on February 27. “The banks are the lubricant that will keep the economy going.”

A bright bugger like Vernon Small should know what would happen if the economy ran out of lubricant.

Alf says The Boss is in the driving seat and he did the right thing to stick a dipstick into the crankcase of our banking system on behalf of the public of New Zealand. The Dom-Post should have used another dipstick to measure the merits of his actions.

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