Moreover, Kiwisaver has the potential to further boost demand for investment products. The ongoing review of the regulation around financial product provision may also lead to some improved cost-efficiencies for firms wanting to offer debt securities.
The second key area is resilience. The euro area banking sector is underpinned by strong capital positions. Banks' aggregate Common Equity Tier 1 ratio stood at 15.3% at the end of 2022, well above the minimum requirements. And the decline in nonperforming loan (NPL) stocks continued last year, with banks' aggregate NPL ratio stabilising at 2.3% in the fourth quarter.