We also need to be on guard against the emergence of a shadow banking sector, structured to sit outside our regulatory perimeter, and on the need to have the right powers and tools – an ongoing issue for financial market infrastructures.
As the regulator we need to remain aware of these risks, watch for those emerging, and react appropriately so as not to forestall desirable innovation. Conclusion Financial stability matters a lot. Crises have significant costs for the financial system, the wider economy and all New Zealanders.