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Evaluation of post-GFC policy response of New Zealand: non-banking perspective
Abstract
Purpose
– The purpose of this study is to explore whether the present measures being taken by the New Zealand (NZ) government are strengthening its non-banking sector effectively to address the recent financial crisis and ensure better financial stability to the economy.
Design/methodology/approach
– The basic methodology used in this paper is the “documentary research method”. For this study, data has been collected from various published sources; e.g. The Bulletin, the Financial Stability Report and other publications of the Reserve Bank of NZ, publications by Statistics NZ and a number of NZ government Ministries, and some newspapers and magazines, etc.
Findings
– We find that the NZ government is revamping the non-banking sector by introducing a prudential regime. However, we also find some gaps in the existing regulatory systems that need to be addressed to ensure soundness in the total system.
Research limitations/implications
– The basic limitation of documentary research will be applicable to this study. Further research may be carried out to investigate the policy responses of government from banking, corporate governance and other regulatory perspectives.
Practical implications
– Our study identifies some gaps in current policy responses along with some suggestions for the future that may be taken into consideration by the respective policy-makers to further strengthen the support provided by policy responses to financial crises.
Originality/value
– Our study provides a unique insight into the evaluation of post-GFC policy response and its effectiveness with regard to non-banking sector and, to our knowledge, the first of its kind in NZ in the post-global financial crisis period.
Business analytics refers to the skills, technology, methods of continuous iterative discovery, and study of past business results. In the banking industry, business analytics can be utilized to the extent that basic banking reporting can be improved with the help of descriptive analytics, predictive analytics, and prescriptive analytics utilizing significant technical developments and the use of big data currently available. The application of business analytics to banking and finance, for both organizations and professionals, is crucial, profitable, and extremely rewarding. Using advanced machine learning technology, combined with analytics, supports banks to research a great deal on customer behavior and preferences, allowing banks to continuously learn and fine tune analytical models to optimize products and services and minimize the cost of offering products across different channels. Cloud-based analytics platforms provide flexibility and elasticity for banks to work at high speed with large data workloads and to gain business value more quickly. In this paper, the major business analytics components - descriptive analytics, predictive analytics, and prescriptive analytics are addressed and their applications in various functions of banks for optimum decision-making as well as for activities such as fraud detection, application screening, custom acquisition and retention, awareness of customer purchasing habits, effective cross selling of different banking products and services, payment collection mechanism, better cash/liquidity planning, marketing optimization, consumer lifetime value, management of customer reviews, etc are analyzed. The effects of these analytics on the banking and financial industry sector's competitive and innovative capabilities are also discussed.
The global financial crisis has reinforced the pre-existing belief in the weaknesses of the Basel II Accord. It is argued that capital-based regulation and the Basel-style capital regulation cannot deal with financial crises and that attention should be paid to liquidity and leverage. The Accord is criticised, in view of what happened during the crisis, for allowing the use of bank internal models to determine capital charges, for boosting procyclicality of the banking industry, for reliance on rating agencies and for being an exclusionary, discriminatory and a one-size-fits-all approach. It may not be possible to salvage Basel II, and the way forward is perhaps to abandon the idea of unified international financial regulation.
Methods of Social Research, 4thed
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