As we have noted in the Bank’s Financial Stability Report and in speeches, while the government and corporate sectors have been net savers in recent years, the household sector has been a heavy net borrower, and this has been a driver of New Zealand’s external indebtedness.
Aside from the potential financial stability or soundness concerns this raises, it may also have implications for product and service innovation, and ultimately the dynamism of our financial system. We asked at the beginning of this paper how well our financial services industry works for us. To conclude: banks deliver basic banking services in New Zealand reasonably efficiently.