Nevertheless, New Zealand’s policy framework remains well within the norms of international central banking practice. Although there are, as always, challenges facing the conduct of monetary policy as we move forward, we are well-placed to take them on. References Fitch Ratings (2007) “House prices and household Debt – Where are the risks?” Special Report, 29 July. IMF (2007) World Economic Outlook, October.
What is perhaps novel in recent experience is the scale with which risk appetite could be accommodated by the global financial system and, equally, the scale of the damage wrought by the ensuing shift to risk aversion. All of this has, of course, complicated the operation of monetary and other policies and, in some cases, threatened to overwhelm them.