December 2008 Reserve Bank Bulletin released
The Reserve Bank today released the December 2008 issue of the Reserve Bank of New Zealand Bulletin.
This edition of the Bulletin is built around the theme of liquidity and New Zealand's financial markets.
The first article discusses the evolution of the Reserve Bank's liquidity management arrangements over the past few years. This evolution includes the measures introduced this year as the global financial system turmoil deepened. The arrangements are now more robust and adaptable to a variety of stresses, including those the economy currently faces.
The second article explores how instability in the international financial system spread far beyond its original source in the US subprime mortgage market, including to New Zealand. The article discusses the key role of New Zealand's debt to offshore investors – a substantial part of which is due to local banks raising funds offshore for lending in New Zealand.
The existence of settlement risk is one reason why banks need to ensure they have adequate liquidity resources at all times. The third article looks at settlement risk in the retail payment system and how the Reserve Bank is addressing it through its payment system oversight activities.
The fourth article explains the new regulatory framework for non-bank deposit takers.
Finally, the edition includes the results of the Reserve Bank's 2008 survey of Bulletin readers.
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