Central banks monitor these developments carefully, and their impact on business and consumer sentiment and asset prices. New Zealand’s economy has been growing faster than potential output for five years, and the Bank’s forecasts suggest that we now have a small positive output gap. Long-term inflation expectations remain well-anchored at around 2 percent and shortterm inflation expectations have been rising slowly.
In addition to mandatory actions of Threshold 1, Restriction on branch expansion; domestic and/or overseas Restriction on management compensation and directors’ fees, as applicable  _  borrowers below certain rating grades • Reduction in risk assets • Restrictions on/ reduction in credit expansion to unrated borrowers • Reduction in unsecured exposures • Reduction in loan concentrations; in identified sectors, industries or borrowers • Sale of assets • Action plan for recovery of assets through identification of areas (geography wise, industry segment wise, borrower wise, etc.)