Our banking system is well-capitalised, vanilla, and mortgage lending is generally on good credit quality. The large Australian banking groups, of which the major New Zealand banks are a part, are now among the largest and highestcredit-quality banks in the world.
Also, our established track record for transparency in our regulatory institutions, sound management of the public accounts, and forward-looking monetary policy are well-regarded internationally. Through this episode, we have attracted relatively little adverse attention in financial markets. Finally, New Zealand’s freely floating exchange rate is an effective buffer against the current, internationally sourced, shock.