When all of these things happen, the financial system makes its maximum contribution to sustainable growth in the economy and to the welfare of New Zealanders. Financial stability exists when the financial system is resilient to a wide range of economic and financial shocks, and able to absorb financial crisis losses with least disruption.
There are obviously a number of dimensions to this proposition, that I and other Reserve Bank staffers have talked about at length in recent speeches and articles. I don't intend to rehearse that material here, but commend it to you if you are interested. It's all on our website.