Central Banking in a Post-Crisis World

The Reserve Bank of New Zealand Bulletin, December 2012 | Go to article overview
Save to active project

Central Banking in a Post-Crisis World


26 October 2012

Pursuing price stability and financial system stability is the best way that the Reserve Bank can bolster New Zealand's long-term economic growth, Reserve Bank Governor Graeme Wheeler said today.

In a speech to the Admirals' Breakfast Club in Auckland, Mr Wheeler said New Zealand should be capable of better economic growth given its tremendous assets. But as a small open economy, it is continually buffeted by external economic and financial shocks.

"New Zealand needs to reverse the slow-down in multifactor productivity growth and the decline in value-added in our tradables sector, and reverse the shift of resources into the public sector and non-traded activities," Mr Wheeler said.

He noted that large central banks in many advanced countries are operating in new territory with unprecedented policy settings.

"Price stability and financial stability remain the Reserve Bank's central objectives for monetary policy and prudential policy. These provide the best framework for achieving stronger growth in output and employment in the longer term," Mr Wheeler said.

"The recent Policy Targets Agreement (PTA) reinforces the importance of price stability, and introduces the goal of keeping future average CPI inflation near the 2 percent mid-point of the 1 percent to 3 percent target range. Over time, attaining this outcome should help to anchor inflation expectations around the mid-point."

In the wake of the Global Financial Crisis, central bankers and fiscal authorities are now more conscious of potential risks and possible flow-on effects to the banking sector. Mr Wheeler said the Reserve Bank has placed a high priority on strengthening New Zealand's prudential regime, including introducing macro-prudential instruments and having an Open Bank Resolution capability in place.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
Loading One moment ...
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited article

Central Banking in a Post-Crisis World
Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

While we understand printed pages are helpful to our users, this limitation is necessary to help protect our publishers' copyrighted material and prevent its unlawful distribution. We are sorry for any inconvenience.
Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.

Are you sure you want to delete this highlight?