Managing Capital for your business: FINSIA – Rosebank Business Association Event
If only there was a crystal ball for business owners to foresee obstacles in the future – forecasting, preparation and growth would be much simpler. A recent FINSIA - Rosebank Business Association event with Deputy Governor of the Reserve Bank of New Zealand speaking, had FINSIA and Rosebank Business Association members hoping for a glimmer of what the future may hold.
The FINSIA – Rosebank Business Association lunch: Managing capital for your business, was a huge success with 150 FINSIA and Rosebank Business members attending. The mood in the room was abuzz as members gathered to hear guest speakers Geoff Bascand and Leon Grandy.
Geoff Bascand is the Deputy Governor of the Reserve Bank of New Zealand and Leon Grandy is a Senior Fellow of the Financial Services Institute of Australasia (FINSIA) and NZ’s only Chartered Banker.
Following the recent housing announcements from the government on 23 March, many local business owners were keen to hear what both had to say on the current condition of the economic market.
While the Reserve Bank does not have the capacity to engage with business associations frequently, Geoff says the opportunities to have conversations with SMEs and strengthen relationships with the FINSIA and Rosebank Business Association is valuable.
“We can’t make policy without speaking to people at the grass roots level,” says Geoff. “We appreciate the relationship and the opportunity to be here as well.”
Throughout the presentation, Geoff looked back at New Zealand’s economy since Covid-19 hit, just over one year ago. In Geoff’s role he leads the Reserve Bank’s Financial Stability Group, overseeing policy and analysis and supervision, and providing support through data and statistics.
While the New Zealand economy has certainly rebounded stronger than the Reserve Bank could have foreseen, Geoff believes we are not out of the woods yet. The economy is doing well, and he argues this is partly because monetary and fiscal policy are supporting this.
For business owners wondering what risks are around the corner, the message from Geoff was positive, with a sailing analogy for the Auckland audience. Likening the economy to a sailing boat, Geoff said it was important to not pull the wind out from the sail too early.
While we are currently on a moderate growth path, Geoff says the economy celebrations need to hang on as we are not there yet.
“We won’t lift interest rates until we are really confident inflation, and the economy, is where it should be.”
Regarding housing, Geoff says there are some financial policy tools that could potentially be used and indeed dampen risky lending. In May, the Reserve Bank is set to give policy advice to the government on interest only loans.
In an uncertain world, Geoff said the Reserve Bank wants to remove barriers that do not need to be there, to create more certainty.
“If we (the Reserve Bank) can provide more information and be trusted to be stable, then this can give an anchor for them (SMEs),” he says.
Leon Grandy spoke with the audience about the bridge from banking to the boardroom. His informative talk covered growth through acquisition where he stressed the importance of getting real equity for your business and not using the equity of personal housing. He believes there is no lack of capital in New Zealand for businesses to do well thought through things with a proper plan.
Leon also spoke on executing governance within a business and understanding shareholders’ interests, including the importance of understanding all the stakeholders.