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More reaction to surprise OCR cut

As it's a special week with a surprise OCR decision I'm sending you a second edition of TMM Online.

Part of the reason for this is we did a little video interview with The Co-operative Bank chief executive Bruce McLaughlin yesterday. It's worth watching to hear his views on passing on OCR cuts, why the Reserve Bank surprised markets and his view on future interest rate movements.

While The Co-operative Bank passed on the full 25 basis point OCR cut, the three big banks which have made changes so far (ANZ, Westpac and Kiwibank) have only passed on some of the cut. It's hard to understand the rationale used - increasing funding costs - for not passing on the cut. Especially when Kiwibank reduced some of its longer term rates.

If you have a view on this please let me know. You can email me here.

The other story which caught my eye this week was on alleging banks had "secret" interest rates. It seemed like a bit of a beat up to me. All it was referring, I assume, was the servicing calculations that are used when assessing loans. We know lenders, under the Responsible Lending Code, have to be much more focussed on a borrower's ability to repay a loan.

Again it would be good to hear your thoughts.

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