Figure 2: NZ’s real effective exchange rate  Source: Bank for International Settlements Note: BIS real effective exchange rate for New Zealand, broad measure incorporating bilateral rates with 61 economies. It is, nevertheless, possible that the exchange rate could remain strong for some time.
The European authorities have taken a number of actions over recent years to alleviate financial system risks, including increased support from the ECB and ongoing progress in unifying the system of banking regulation. More generally, the condition of the European financial sector has been gradually improving in a number of respects.