There's strong opposition to a move by the Reserve Bank to increase banks' capital, from a man who used to work for the regulator.

The Reserve Bank is proposing a lift in the amount of risk weighted capital retail banks hold, from 8.5 per cent to 16 per cent.

Submissions on the proposal were released publicly yesterday. In total, 161 were received including responses from the major banks, large companies like Fonterra, business and social organisations and numerous individuals.

All four major banks - ANZ, Westpac, BNZ and ASB - oppose the proposals in their current form and warn they will mean higher interest rates for borrowers, lower rates for savers and lower levels of GDP growth for the nation.

Former Reserve Bank economist, Michael Reddell  told Mike Hosking the process has been appalling because there hasn't been a proper cost-benefit analysis yet.

"Sure, you can always make banks a little bit safer, but they are really safe as it is. And the costs of what the banks are proposing to the economy are going to be potentially quite serious." 

He says it comes at a time when the economy is teetering on a global slow-down.

"When interest rates are already very, very low, and it's going to be very hard to handle the next recession anyway, and yet banks are saying 'do this, and we'll be turning back on the availability of credit'." 

ANZ told the NZ Herald that they will review the scale of their New Zealand operations if the moves went ahead, while BNZ says it would need to raise equity and would not be allowed to rely on the National Australia Bank for support.