A very large proportion of foreign capital being utilised in New Zealand is now intermediated through the banking sector via secured residential mortgage lending. A slower housing market will thus pose challenges to bank risk management and we will continue to monitor this closely, especially when implementing the new bank Basel II capital requirements regime.
BIS central bankers’ speeches  1  The external deficits, budget deficits and levels of public debt of the countries in the second group fast became unsustainable once they were no longer financed externally and in particular by the rest of the Union, the inadequate governance of which was then laid bare.