Manufacturers, exporters support bank inquiry

An inquiry into the financial sector would be supported by 86 per cent of members of the New Zealand Manufacturers and Exporters Association (NZMEA) who responded to a survey.

Parliament's finance and expenditure committee had been considering holding an inquiry into interest rates but decided yesterday, on a majority vote, not to go ahead with it.

NZMEA chief executive John Walley today said the results of the association's survey showed clear and deep dissatisfaction with the banks, although it was not universal.

The support for a wide-ranging inquiry into the financial sector and its impact on the real economy was overwhelming, he said.

The issue was far more complex than simply looking at the gap between the official cash rate and retail interest rates.

The NZMEA survey also found:

* 63 per cent of respondents reported their bank had increased the margins they paid on credit facilities;

* 57 per cent reported their bank had tightened covenants associated with their credit facilities;

* 55 per cent reported their bank had increased charges associated with their credit facilities;

* 27 per cent reported their bank had tried to increase their credit facility costs but maintained existing arrangements when they complained; and

* 46 per cent reported their bank had used the opportunity of any change of credit facilities to increase cross guarantees.

- NZPA