It is this short-term financing share that creates the potential for systemic spillovers in the form of deleveraging and marketwide fire sales of illiquid assets. This short-term financing share is difficult to measure comprehensively, but exhibit 5 presents one graph that gives some comfort. The graph shows dealer financing of corporate debt securities, much of which is done via short-term repurchase agreements (repos).
In this sense, we are describing a growth profile that reflects the steadying influence of maintaining low inflation, which in turn should contribute to New Zealand’s future growth potential.