Academic journal article The Reserve Bank of New Zealand Bulletin

Editor's Note

Academic journal article The Reserve Bank of New Zealand Bulletin

Editor's Note

Article excerpt

In this edition of the Reserve Bank Bulletin we present four articles that cover macro-financial stability, procyclicality of the financial system, global trade and the management of the Reserve Bank's balance sheet.

In our lead article, Deputy Governor Grant Spencer explains the Reserve Bank's philosophy regarding macro-financial stability. The article places the Reserve Bank's macrofinancial stability function within the international context and reviews the appropriate policy framework in light of the global financial crisis. Internationally, attention is turning towards new macro-prudential instruments that might enhance the stability of the financial system. New Zealand is also considering the potential of new macro-prudential tools which could be implemented by the Reserve Bank under its existing prudential policy powers. The article notes that changes to both micro- and macro-prudential policies will need to be carefully managed.

Our second article by Rebecca Craigie and Anella Munro examines procyclicality in New Zealand's financial system. In this context, procyclicality refers to the extent to which the structure of the financial system might amplify the tendency of the economy to experience business cycles. For example, during expansions, house prices often rise, increasing households' net worth and collateral. This increases households' ability to borrow and further fuel an expanding economy. The article concludes there are many ways that the financial system might amplify the cycle in the economy. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.