Banks likely to 'tough it out'

So, according to the Reserve Bank, we poor borrowers who take out home loans on floating rates are being ripped off.

The central bank, in a paper this week, said the margins on floating rates are too high and they should come down. They are right on that point.

But the question is what can be done to get them down? Some suggest the government should use its bank, Kiwibank, to drive home loan rates lower.

It already has been doing this. Kiwibank had successfully been keeping the big banks honest and leading rates lower in the past. They became so good at it often it would announce rate changes straight after an OCR announcement.