The strongest banks are likely to benefit from that strength by operating at lower costs; weaker banks are likely to be under pressure to strengthen their position. Over the longer term we believe that stronger market disciplines will make a major contribution to the soundness of New Zealand’s financial system.
According to our primary mandate, our definition of price stability means an inflation rate below but close to 2% over the medium term. This is the needle in our compass. Our medium-term orientation means, figuratively speaking, that we provide the steady hand on the tiller. How can the citizens of the euro area have confidence in the steady course of monetary policy?