That seems by far the most likely outcome. But the message of this speech has been simply that when the ratios are as stretched as they have become in New Zealand, we are more vulnerable if things goi ng wrong - and that is something which firms, households, the government, and a central bank focused on financial stability need to be aware of.
All that underscores the importance of a sound macroeconomic framework for fiscal and monetary policy, and of robust and well-managed banks. For us at the Reserve Bank, it also highlights the need for continual monitoring of the nature of the risks and the ways in which demand for finance, and the terms on which it is available, are changing.