RBNZ "disappointed" banks haven't passed on OCR cut

Reserve Bank Deputy Governor Grant Spencer said on Wednesday he was disappointed the banks had largely not passed on the last 50 basis point cut in the Official Cash Rate (OCR) to variable rate borrowers, including many who broke fixed rate mortgages to take advantage of the falling OCR. However, he told a news conference after the release of the Reserve Bank's Financial Stability Report that he did not believe the Reserve Bank's monetary policy had lost its potency. "I don't think that the OCR has lost its leverage," Spencer said. Elsewhere, Spencer said housing was still over-valued and it was too early to pick the bottom of the housing market downturn despite a pickup in volumes and more stable house prices in the last two months.