Reserve Bank of New Zealand Bulletin articles
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September 2011 (Vol. 74, no. 3)
Download the complete issue of the September 2011 Bulletin (PDF 1.8 MB)
Articles
Editor’s Note (PDF 747KB)
A primer
on Open Bank Resolution (PDF 746 KB)
By Kevin Hoskin and Ian Woolford
The Reserve Bank supervises registered banks with the objective of promoting the maintenance of a sound and efficient financial system and avoiding significant damage to the financial system from the failure of a bank. While the Reserve Bank designs its prudential supervision to reduce the risk of banking failure, bank failures remain possible. It is therefore essential that there are robust processes in place to manage bank failures to minimise the costs and disruption to the financial system and the wider economy, whilst minimising the cost to the taxpayer of doing so. This article outlines the work that the Reserve Bank has been doing to implement its Open Bank Resolution (OBR) policy to meet these objectives, and explains how the policy would affect different parties were it necessary to use it in practice.
Conference
summary: New Zealand’s macroeconomic imbalances – causes and
remedies (PDF 723 KB)
by Christie Smith
This article reports on a policy forum sponsored by the New Zealand Treasury, the Reserve Bank of New Zealand, and Victoria University of Wellington on New Zealand’s macroeconomic imbalances. Chief among these imbalances is New Zealand’s large stock of net foreign liabilities, but there are also recurrent concerns about high domestic interest rates, the high exchange rate, and about New Zealand’s relatively poor growth performance. The forum highlighted that both private and public sectors contribute to imbalances, and canvassed a wide array of policies that might help reduce the vulnerabilities that these imbalances entail. Such policies include directly improving the government’s net saving, and using policies to influence private sector saving and investment behaviour.
Recent trends
and developments in currency – 2010/2011 (PDF 1.3MB)
By Kristin
Flavall
This article reviews trends in the use of currency in New Zealand and reports developments of particular interest. The value of currency in circulation continues to grow, and there was a spike in the demand for cash after an earthquake hit Christchurch, one of New Zealand’s largest cities. Coin demand also increased due to an increase in the Goods and Services Tax (GST) rate. New Zealanders use currency frequently for lower value transactions and are satisfied with its quality. The rate of counterfeiting is low in New Zealand by international standards. To maintain the quality of circulating banknotes, the Reserve Bank continually destroys and replaces ageing banknotes.
Submission to the
Productivity Commission inquiry on Housing Affordability (734 KB)
Reserve
Bank of New Zealand
Executive Summary Changes in house prices matter for the Reserve Bank of New Zealand, both through their cyclical implications for monetary policy and the longer-term implications of the level of house prices for macroeconomic and financial stability. Demand for housing can change, at times quite quickly, and, as in any market, it is important that the supply of houses quickly responds to changes in demand. Supply response moderates potentially damaging swings in house prices. Policy can have an influence on housing market outcomes through a variety of channels, in particular over the longer-term, by helping ensure that the regulatory regime facilitates the ready adjustment of supply to demand.
Workshop on national accounts and financial statistics, July 2011 (712
KB)
By Phil Briggs and Rochelle Barrow
The Reserve Bank, in conjunction with Statistics New Zealand, held a workshop in June on New Zealand’s national accounts and financial statistics. Discussions centered on potential improvements to the national accounts for New Zealand, measuring GDP, productivity and the government sector’s activities, and improving financial statistics. Workshop participants supported the development of a full set of national accounts for New Zealand, including financial accounts, which measure changes in financial assets and liabilities, in order to improve understanding of issues related to saving and wealth. There was also support for household surveys that measure the distribution of assets and liabilities across the population. Work on improving the measurement of output and the productivity of services was seen as vital to maintaining accurate measures of real GDP.
For the Record (PDF 556KB)
Recent discussion papers, news releases and publications from the Reserve Bank of New Zealand
The views expressed are those of individual authors and do not necessarily reflect official positions of the Reserve Bank of New Zealand. Articles published in this Bulletin may not be wholly or substantially reproduced without the permission of the Reserve Bank of New Zealand. Data, brief extracts from articles, and other material appearing in the Bulletin, may be used without restriction provided due acknowledgement is made of the source.
