Shamubeel Eaqub: Simplicity Chief Economist on the debate over potentially loosening capital requirements for banks

There's debate over the potential loosening of bank rules. 

Reserve Bank requirements —forcing banks to have enough capital to withstand a one-in-200-year shock— look set to be loosened. 

Banks say that could reduce the cost of borrowing. 

But Simplicity Chief Economist Shamubeel Eaqub told Andrew Dickens it won't address the underlying reasons why banks aren't lending more money. 

He says mortgage rates are currently 2% over the cost of borrowing, and banks aren't lending enough to businesses and farms. 

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