As a full service central bank – that is undertaking financial policy in addition to monetary policy – we are very cognisant of the financial stability risks that can arise. We have highlighted the actual and potential risk-taking issues in Financial Stability Reports over many years.
We have also discussed the importance of financial literacy, financial institutions’ conduct and culture, the benefits of collaborative fiscal support, and the importance of a deep and broad capital market to promote financial soundness. There is a broad base of work to be done in New Zealand in this area.