The Reserve Bank appears to have caved to pressure with its decision to review its capital requirements.
The central bank introduced stricter rules in 2019, requiring banks to hold capital to buffer them against a 1-in-200-year financial crisis.
The rules have been criticised for driving up lending costs.
Former Reserve Bank economist Michael Reddell told Mike Hosking there's been a clear appetite for change.
He says the Reserve Bank has "read the tea leaves", including criticism it's faced from banks, businesses, and Finance Minister Nicola Willis herself.
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The Mike Hosking Breakfast