Reserve Bank head Graeme Wheeler's first appearance before a parliamentary select committee descended into farce when the room was cleared to let politicians argue for more time with the new governor.
Finance and expenditure committee chairman Todd McClay turfed everyone out, including Mr Wheeler and his officials, when opposition MPs opposed his move to wrap up proceedings at 1pm in Wellington after starting 15 minutes late.
Several minutes later, NZ First leader Winston Peters and Labour finance spokesman David Parker emerged saying the hearing was over and Mr Wheeler headed back to his office.
Mr Wheeler was making his first appearance in front of a parliamentary committee as central bank governor, having released the bank's six-monthly financial stability report earlier today.
Before being ejected, he told politicians that quantitative easing policy undertaken by central banks in the US, Japan and Europe were "a sign of desperation" and that New Zealand had scope to cut the benchmark interest rate if needed.
"If the issue is should we move to quantitative easing in New Zealand, we don't think that's something that deserves serious thought at this point," he said.
He quashed suggestions lowering the official cash rate would rein in the strength of the New Zealand dollar, saying the currency is more closely aligned with the nation's terms of trade over the long term than interest rate adjustments.
"It's hard at this point to see any factor that would lead to a major depreciation in the exchange rate in the short term," he said. "There's no easy solution out there that simply says cut interest rates 25 pips and the exchange rates will come off 10%, that just doesn't work."
Mr Wheeler backed the level of local bank profits, saying lenders' return on assets was about average among developed nations and low in terms of a return on equity. He did not agree with the view that high bank profits are the price New Zealand pays for financial stability.
"The banking system here as we see it at this point is healthy, it's sound and it makes what we believe acceptable rates of return that aren't out of line with international comparisons," he said. "We see a lot of competitiveness and a lot of efficiency."
This article is tagged with the following keywords. Find out more about MyNBR Tags
- Xero directors Drury, Winkler and Morgan cash in on 35% share price rally
- MARKET CLOSE: NZ shares mixed; Spark, Fletcher join Asian rally, Xero drops as Drury trims stake
- Sir Ralph Norris spells out reasons for Fonterra board departure
- iPredict closing down due to money laundering risk
- Serco's prison report challenge: Hide and Davis go head-to-head
Most listened to
- “A very ballsy thing to do” – Rodney Hide and Kelvin Davis discuss Serco’s response to Correction’s Mt Eden Prison report
- “The response from shareholders has been overwhelming” — A2 Corporation chief executive Geoff Babidge
- Greg Gent says a board of 13 people is "prehistoric"
- Arvida CEO Bill McDonald on his company's half-year net profit
- Lance Wiggs on the future of food exports
- Auckland Councillor Chris Darby on the Council's alternative funding report
- Nevil Gibson discusses his latest Editor's Insight on oil prices
- Campbell Gibson, Nick Grant and Chelsea Armitage chat about the inner workings of New Zealand media
- Paul Brislen discusses the 'snake oil' sales tactics of SalesConcepts
- Fonterra chief executive Theo Spierings reveals his ambitious China plan
- UDC Finance chief executive Wayne Percival talks about the company's profit
- Hamish McNicol discusses the latest court stories