Thursday, 17 May 2012

A Rush And A Push And The Land Is Ours

Robert Guyton posted on the turmoil in Greece (based on a blog post by Paul Krugman) and in the comments section Shane Pleasance posted a link to the Reserve Bank's plans for dealing with failures of banks in New Zealand.  Thanks Robert and Shane, very thought-provoking.
I read the Reserve Bank document last night and, as I was so tired, didn't absorb much of the content.  What I noted was the language used.  Shane had used the colloquialism"haircut" to describe what would be required of the banks.  It's used widely enough, so it's appropriate on blogs.  But it's all through the Reserve Bank's plan, too.
Is it only me that thinks it is unprofessional for an organisation as important as the Reserve Bank to describe the method it plans to use to manage bank defaults as a haircut?
It's not even an accurate description of the outcome.  We've all had a haircut at some stage of out lives, they don't hurt (usually) and most times we come out looking better than we went in.  A more accurate analogy would be "amputation" or "euthanasia".  But I'd prefer the Reserve Bank completely avoided informal language when describing something so serious; just say "in some circumstances we will let banks fail."

The Smiths - Strangeways, Here We Come, 1987

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