Our package includes a combination of lower interest rates, direct lending to banks, and ongoing quantitative easing. We will not overly rely on a single tool that could lead to suboptimal outcomes. Moreover, New Zealand remains a great environment for banks to operate in – recording some of the highest profitability in the world, with some of the lowest risks for shareholders.
Our banks are in a strong financial position, with capital and liquidity headroom, to support their customers. New Zealand’s financial institutions must use their risk models and capital allocation tools to be part of New Zealand’s economic success. Banks and financial intermediaries will need to make important decisions based on sound risk-judgement.