We therefore adopted the Targeted Long-Term Refinancing Operations (TLTRO), as part of our credit easing package, in order to create incentives for banks to lock-in low long-term central bank funding and originate cheaper loans to the real economy. After we launched this credit easing in the summer 2014, the inflation picture materially worsened.
Setting rigorous but not too stringent requirements is our challenge, informed by research, experience and feedback.7 We need to understand New Zealanders’ appetite for risk, analyse the costs and benefits of regulatory requirements, and have processes for decisionmaking that provide confidence that in high quality decisions being made.