Commerce Commission Chairman John Small on banking, market studies and why he joined the competition watchdog

Commerce Commission Chairman John Small on banking, market studies and why he joined the competition watchdog

 

Commerce Commission Chairman John Small says the regulator will be digging into banks’ capital requirements and the prudential regulation regime to examine whether it has any impact on competition as part of its market study.
On Tuesday the Government announced it had initiated a market study into the banking sector, after completing market studies into fuel, supermarkets and residential building supplies.
Industry lobby group, the New Zealand Banking Association (NZBA), said it would work constructively with the Commission on the study, and the market study would “ease any concerns in the community about competition and innovation in the banking industry”.
The NZBA said in recent years the industry had seen bank teams tied up with significant regulatory requirements, limiting the ability to focus on new product development.
“We hope the Commerce Commission will look closely at the regulatory environment as part of its study.”
Small said the Commission would look at regulation of the sector, including capital adequacy (the amount of money banks need to have to ensure they don’t fall over in times of stress).
“We know that prudential regulation, for example, affects the amount of capital that you have to have in a bank. I’m not sure whether we’ll find out that’s a factor making it harder for small banks. I don’t know if that’s true or not. That’s something that we’ll be looking at.”
He said banking prudential regulation, overseen by the Reserve Bank, was aimed at making sure banks were well-capitalised so that they can withstand the bad times.
That was a different concept to return on equity, for example, where a businesses’ income is compared to shareholders’ equity, Small said.
The KPMG annual financial services report found the New Zealand banking sector had a return on equity of 13.4% in 2022, compared to 15% on the companies in the NZ stock exchange’s top 50 index, the NZX50.
“We’re not going to be estimating rates of return ourselves because everybody’s done that. We’re trying to understand what does this mean? Is it really an indicator with benign explanations? That kind of thing.”
Small said the reaction from the banking community to the study had been pretty good.
“Some of the banks have made it really clear that they see this as an important way to help them build trust and confidence in the system. Everybody wants that. It’s no good if people are mistrusting of banks, and so we think it can help there. And that’s obviously one of the aims of the Commission, to build trust and confidence on market impact of regulation of various sorts on banking competition.”
Small held a media call a day after the banking market study was announced, where he outlined why market studies matter and said these kinds of industry deep dives into competition by the regulator hadn’t happened for decades.
The Commission Chairman said market studies are the reason he joined the regulator. He said market studies, introduced through a Commerce Act amendment in 2018, were highly complementary to its other work enforcing laws and determining whether there were breaches of competition law. Market studies were more proactive, Small said.
Small said the firms involved in the market studies thus far had reacted well and professionally to the competition regulator’s probes. He said market studies were common in other jurisdictions.
Small said his sense was that there was broad political support for competition policy to be effective, including market studies.
He said there had been “little proof points” that had popped up through the market studies undertaken which showed market studies do have an impact. Land covenants, for example, had been found to be hampering development of supermarkets and the industry players agreed to remove them. Similarly, in the residential building supplies study land covenants had been found to be problematic. The grocery study had already prompted the duopoly to start working on wholesale networks, and rebates in building supplies had also been junked after the Commission looked into the sector.
” That’s demonstrated a clearly positive effect on lots of places, where ordinary New Zealanders do the shopping, there’s now more locations that supermarkets can be opened.”
But he knows consumers, and business, are under pressure. A recent consumer survey from the Ministry of Business, Innovation and Employment’s Consumer Protection team found confidence in New Zealand’s consumer regime had weakened.
Small said that finding was disappointing, and the Commission had plans underway to improve how consumers’ interact with, and perceive, the work of the regulator including how consumers’ first contact the Commission, to make its “front door” welcoming.

 

 

 

상무위원회위원장 John Small이은행, 시장조사 및 경쟁 감시단에 합류한 이유에 대해 설명하다.

 

John Small상무위원회위원장은규제당국이시장조사의일환으로은행의자본요건과건전성규제제도가경쟁에영향을미치는지조사할것이라고말했다.
화요일에 정부는 연료, 슈퍼마켓 및 주거용 건축 자재에 대한 시장 조사를 완료한 후 은행 부문에 대한 시장조사를 시작했다고 발표했다.
업계로 비단체인 뉴질랜드은행협회(NZBA)는 이 연구를 위해 위원회와 건설적으로 협력할 것이며, 시장조사가 “은행업계의 경쟁과 혁신에 대한 커뮤니티의 우려를 완화할 것” 이라고 말했다.
NZBA는최근몇년동안은행업계가상당한규제요건에묶여새로운상품개발에집중할수있는능력을제한하는것을목격했다고말했다.
“우리는 상무 위원회가 연구의 일환으로 규제환경을 면밀히 검토 하기를 바란다.”
Small은위원회가자본적정성(은행이 위기상황에서 쓰러지지 않도록 하기 위해 은행이 보유해야 하는 금액)을 포함한 해당 부문에 대한 규제를 검토할 것이라고 말했다.
“예를 들어 건전성 규제는 은행이 보유해야 하는 자본의 양에 영향을 미친다는 것을 알고 있다. 그것이 소규모 은행을 더 어렵게 만드는 요인이라는 것을 알게 될지 모르겠다. 사실인지 아닌지는 모르겠다. 그것은 우리가 앞으로 찾아 가야 할 방향이다.” 라고 밝혔다.
그는 연방준비은행이 감독하는 은행건전성규제는 은행이 불황기를 견딜 수 있도록 자본을 충분히 확보 하도록 하는데 목적이 있다고 말했다.
이는예를들어기업의소득을주주자본과비교하는자기자본수익률과는다른개념이라고Small은말했다.
KPMG의연례금융서비스보고서에따르면 2022년뉴질랜드은행부문의자기자본수익률은 13.4%로, 뉴질랜드 증권거래소의 상위 50개지수인 NZX50에속한기업의 15%에비해낮았다.
“우리는 모두가 그렇게 했기 때문에 수익률을 직접 추정하지 않을 것이다.  우리는 이것이 무엇을 의미 하는지 이해하려고 노력하고 있다. 정말 좋은 설명이 있는 지표인가? 라는 질문들을 포함한다.”
Small은이연구에대한은행권의반응이꽤좋았다고말했다.
“몇몇은행은이연구가시스템에대한신뢰와확신을구축하는데도움이되는중요한방법이라고생각한다는점을분명히밝혔고,이는모두가원하는것이다.  사람들이 은행을 불신하는 것은 좋은 일이 아니기 때문에 우리는 그것이 도움이 될 수 있다고 생각한다.  다양한 종류의 규제가 시장에 영향을 끼치는 은행 경쟁에 대한 신뢰와 확신을 구축하는 것이 바로 위원회의 목표 중 하나이다.”
Small위원장은은행시장조사가발표된다음날언론과의통화에서시장조사가중요한이유를설명하고규제당국이이처럼업계경쟁에대해심층적으로조사한사례는지난수십년동안없었다고말했다.

위원회 위원장은 시장조사가 자신이 규제기관에 합류한 이유라고 말했다.  그는 2018년상거래법개정을통해도입된시장조사가법을집행하고경쟁법위반여부를판단하는다른업무와매우상호보완적이라고말했다. Small은시장조사가더능동적이었다고말했다.

Small은지금까지시장조사에참여한기업들이경쟁규제당국의조사에전문적으로잘대응했다고말했다.  그는 다른 관할권에서도 시장조사가 일반적이라고 말했다.
Small은시장조사를포함한경쟁정책의효과에대한광범위한정치적지지가있다고느꼈다고말했다.
그는 시장조사가 영향을 미친다는 것을 보여주는 “작은 증거 포인트”가 시행된 시장조사를 통해 나타났다고 말했다.  예를 들어, 토지 계약은 슈퍼마켓의 개발을 방해하는 것으로 밝혀졌으며 업계 참여자들은 이를 폐기하는데 동의했다. 마찬가지로 주거용 건축 자재연구에서도 토지 규약이 문제가 있는 것으로 밝혀졌다.  식료품 연구를 통해 이미 독과점 업체는 도매 네트워크에 대한 작업을 시작했으며, 건축 자재에 대한 리베이트도 위원회가 해당 부문을 조사한 후 폐기 되었다.

“이는 일반 뉴질랜드인들이 쇼핑을 하는 많은 곳에서 분명히 긍정적인 효과를 보여줬고, 이제 슈퍼마켓을 열 수 있는 장소가 더 많아졌다.”
하지만 그는 소비자와 비즈니스가 압박을 받고 있다는 것을 알고 있다.  비즈니스 혁신 고용부 소비자 보호팀의 최근 소비자 설문조사에 따르면 뉴질랜드 소비자 제도에 대한 신뢰도가 약화된 것으로 나타났다.
Small은이조사결과가실망스럽다며, 위원회는 소비자가 위원회에 처음 연락하는 방법을 포함하여 소비자가 규제기관의 업무와 상호 작용하고 인식하는 방식을 개선하여 위원회의 “앞문”을 환영하는 분위기로 만들기 위한 계획을 진행 중이라고 말했다.