Moreover, gross capital flows are believed to be considerably greater relative to GDP in recent years than in the nineteenth century. (See Alan M. Taylor (2002), "A Century of Current Account Dynamics," Journal of International Money and Finance, vol. 21 (November), pp. 725-48, and Maurice Obstfeld and Alan M. Taylor (2002),"Globalization and Capital Markets," NBER Working Paper 8846 (March).)
While these cross country studies have not played much role in our analysis of determining what we think is the appropriate capital calibration for New Zealand, they do demonstrate that our proposals are by no means extreme. Instead, they move us towards our goal, expressed back in 2017, of capital requirements that are conservative relative to our peers.