In our expectation, the policy interest rate will remain at present or lower levels for an extended period of time and well past the horizon of our net asset purchases. This forward guidance implies a sequencing between the interest rate policy and the quantitative policy that can most efficiently internalise and exploit the intimate complementarities between these two key components of our current stance.
New Zealand’s regulatory approach Given that the banking industry in New Zealand has always been dominated by foreign-owned banks, particularly from Australia and the United Kingdom, any development that makes supervision of the parent bank more effective is welcomed by us. From the Reserve Bank’s perspective, though, we have not seen a pressing need to change our regulatory structures in a similar way.