Our perspective on this task at the Reserve Bank of New Zealand comes from being a small “full service” central bank responsible for both monetary policy setting and supervising the financial system. Our view is also impacted by New Zealand being a small open economy.
This makes us a price taker in the markets for many tradeable goods and also exposes us to the impact of economic and financial shocks in larger economies. It also makes it more difficult for us to set standards of regulatory compliance for our financial sector in isolation and independently of regulatory developments in larger economies.