The structure and management of the Reserve Bank’s balance sheet has changed significantly over the last five years. A big area of change has been in the way that foreign reserves are financed. The Reserve Bank no longer finances its foreign reserves on a fully currency-hedged basis, and now predominantly uses the long-term funds on its balance sheet that naturally arise from its core statutory functions to finance foreign reserves more cheaply and more flexibly than was possible in the past. These efficiency gains have been made possible by changing the way we manage our balance sheet from a model where the financial aspects of different business functions were managed separately to a new integrated asset and liability management model. These changes have been designed to improve the Reserve Bank’s ability to meet its policy functions in a more efficient and cost-effective manner. Our experience of the global financial crisis has shown the Reserve Bank’s new balance sheet structure to be effective and resilient at the time when its financial resources have been most in demand.