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Reserve Bank of New Zealand Bulletin articles

(NB. If you do not have the free Acrobat reader software necessary to read these discussion papers already installed, go to the Adobe website.)

December 2001 (Vol 64, no 4)

Download the complete issue of the December 2001 bulletin (PDF 480KB)

Articles

Editors Note (PDF 15KB)

International capital flows, external debt, and New Zealand financial stability (PDF 86KB)

By Ian Woolford, Michael Reddell, and Sean Comber
New Zealand is unusually dependent on foreign capital. Many of these substantial external liabilities are denominated in foreign currency, yet it is often correctly noted that we are not very exposed to the impact of changes in the exchange rate on the value of net external liabilities. This article goes beyond the aggregated data to further our understanding of the capital flows into and out of New Zealand, and to try to get a little closer to understanding who is taking the foreign exchange risks in these substantial cross-border flows. We then extend the analysis to examine potential points of vulnerability for the New Zealand financial system.

Trends in foreign exchange trading (PDF 141KB)

By Lauren Rosborough
In this article, Lauren Rosborough discusses how global and domestic foreign exchange markets have changed in recent years. These trends are illustrated using the latest Bank for International Settlements triennial foreign exchange and derivatives market survey and other indicators of foreign exchange market liquidity. The size and structure of the New Zealand foreign exchange market has altered in recent years. Trading in the New Zealand dollar now occurs predominately in Australia. There is some evidence to suggest that New Zealand dollar spot market liquidity has fallen but the New Zealand dollar remains quite liquid considering the small size of the New Zealand economy.

Foreign exchange settlement risk survey (PDF 43KB)

By Andrew Rodgers
The world's central banks have been working for several years to promote awareness of the risks associated with the settlement of foreign exchange transactions. In September 2000, the Reserve Bank surveyed the major participants in the New Zealand foreign exchange market to focus attention on settlement practices and the potential risks. This article summarises the findings of that survey.

The current state of New Zealand monetary union research (PDF 57KB)

By Nils Bjorksten
This article surveys recent thinking on the topic of currency unions, separating out and presenting the lessons that apply to the New Zealand context. A decision on joining a currency union is predominantly political, and would probably be accompanied by other complementary measures that also further economic integration. Nevertheless, such a decision has implications for financial markets, the economy in general and the institutional role of the Reserve Bank. For all of these reasons, the Reserve Bank will continue to monitor the literature on the subject, and occasionally contribute to it, in order to facilitate informed debate in New Zealand.

Policy lessons on promoting financial stability (PDF 72KB)

This article sets out a slightly amended version of a paper issued in November 2001 under the auspices of the APEC Finance Ministers' process. The article contains a summary of policy lessons that emerged from a Policy Dialogue on Banking Supervision, held in Mexico in June 2001, as part of an ongoing programme of capacity-building seminars and workshops held in the APEC Finance Ministers' process. The Policy Dialogue was co-chaired by the Reserve Bank of New Zealand and the National Banking and Securities Commission of Mexico.

Speech

Monetary policy in interesting times (PDF 102KB)

Alternatively, link to the html version of this speech by Dr Don Brash