Big report day for big issues. 

Report Number One: The ComCom and the business of banking.  

The market doesn’t work, more banks would help, how to get more banks? How to get less regulation, how to get better deals for the customer? 

Firstly, don’t hold your breath. The ComCom has looked into power and petrol and banking – not a lot changes. 

Nicola Willis didn’t help yesterday morning when she said in response to a perfectly legitimate question about lending practices, that a bank CEO had said they “weight farms differently from houses in terms of risk”, Willis said well they can tell that to the select committee. Which as far as I could work out means nothing, given I'm sure they will. 

Then when asked about the banking lobby being powerful, she said “they may be powerful but democracy is more powerful”. Once again, it means nothing. What she was avoiding was the question ‘will you legislate’, and she was avoiding that because she is not legislating. 

The same way the previous government made a lot of noise about supermarkets and petrol but were never going to legislate either. Instead, what we got was a sign on the footpath showing the 98 price and a Grocery Commissioner who so far is limited to press releases. 

Here is your trouble: we have a lot of banks, we just don't use them. We can switch banks, we chose not to. 

Yes, the rules the Reserve Bank has in place to make banks hold money could be changed, some of the regulation could be changed, but will it materially fix the market? No. 

This, as I always say, is not to defend banks. Banks are highly profitable. Their margins are higher here than Australia. 

But the mistake that is made almost every time, whether its banks, supermarkets, petrol stations, or telcos, is the hype never plays out in reality. 

The jawboning gets the headlines, the action fades into obscurity. 

Let's talk in a year, and you can show me how fundamentally different the New Zealand banking scene is. Or not.