However, constraint that had been caused by severe fund-raising conditions and insufficient capital base has eased considerably. Under these circumstances, major banks have gradually become more active than before in extending loans, while carefully evaluating the credit risks involved. However, credit demand for economic activities such as business fixed investment remains weak. In addition, firms’ moves to increase their on-hand liquidity have settled down.
Figure 4: Debt to disposable income ratio in New Zealand  5  Source: Stats NZ, RBNZ Household Assets and Liabilities Survey, RBNZ estimates. It’s important to remember that while extremely low interest rates have been commonplace in the developed world for over a decade now, New Zealand’s very low interest rate environment is a more recent phenomenon.