New Zealand households' net financial wealth (deposits, shares, unit trusts, pension funds, etc less household debt) is estimated to be only around 70 per cent of our annual disposable income. In the bigger developed countries, that ratio averages around 270 per cent - even after the fall in international share prices last year.
It is this integration that could help us reduce the costs of adjusting to shocks that I described earlier. Specifically, the markets for goods and services, and particularly for labour, would need to become much more unified with those in the United States before it would make economic sense to adopt the U.S. dollar. Right now, our capital markets are fairly well integrated.