crawford. anu. edu. au / publication / cama - working - paper - series / 19682 / stuck - home - housing - demand - during - covid - 19 - pandemic various structural factors such as demographics and productivity that affect future real growth and the balance between savings and investment. a key reason why lower global interest rates have had such a significant impact on house prices in new zealand has been the lack of supply of new housing. land - use restrictions and other constraints on building have restrained the supply of land and housing. it is important to note that this trend has recently turned. building consents are at record levels, at a time when population growth in 2021 was just 0. 5 % 16 ( its lowest level since 1988 ), mortgage interest rates are rising, and there is tighter access to credit. we are now confronted with thinking about how asset prices will react to rising interest rates and how homeowners might react to falling balance sheet wealth. we recognise monetary policy has distributional impacts, including through the housing market. our research17 has shown that monetary policy easing and tightening can affect the distribution of wealth and income through several channels. our monetary policy mandate recognises the limitations monetary policy has in influencing these distributional issues. instead it recognises that the best impact monetary policy can have on economic wellbeing for all is through maintaining low and stable consumer price inflation and doing so in a manner that contributes to maximum sustainable employment. 18 however, te putea matua is a full service central bank and we have responsibilities for both monetary policy and financial stability. our purpose for responding to any unsustainable asset price movement is to ensure broad financial stability is maintained. we aim to ensure that both borrowers and lenders are able to manage their financial risks through good times and bad, and that any specific issues to the otherwise do not lead to general financial instability. to manage some of the cyclical drivers of financial instability we have increasingly deployed a range of ‘ macroprudential ’ tools. since the onset of the pandemic we have removed and then reinstated one of our key prudential settings. we first removed loan - to - value restrictions ( lvrs ) at the onset of the pandemic to ensure our monetary policy easing was most effective in promoting cash flow and confidence, enabling banks to use their credit allocation skills most effectively ( i. e. lending to those who were willing and able to borrow and invest ). by early

mr. brash looks at the implications of the global financial marketplace for new zealand address by the governor of the reserve bank of new zealand, dr. donald brash, to the single financial services market conference in wellington, on 19 / 11 / 97. introduction it ’ s a great pleasure to be here today to share some thoughts with you on the global financial marketplace, and its implications for new zealand. we have recently had a dramatic example of how events in one country can spread rapidly. the recent share market collapse that began in hong kong and spread to equity markets around the world, including new zealand, illustrates just how integrated global financial markets have become. designing and implementing an effective financial policy in pursuit of national goals, in a world of highly integrated capital markets, is one of the most topical and challenging tasks in central banking today. to keep my presentation today within manageable bounds, and reflecting my professional interest, i will constrain my comments to one of the important functions of a central bank, namely, the preservation of stability in the financial system. our focus at the reserve bank is on promoting the maintenance of a sound and efficient financial system in new zealand. this focus involves establishing a policy environment to counteract the possibility of contagious spread of financial distress, and in particular is aimed at encouraging prudent bank behaviour. i will begin by sketching out some of the key trends in global finance, and will then describe the international regulatory response to these developments. along the way, i will tease out the implications for new zealand, and test our approach to banking supervision against these global developments. i will conclude with some crystal ball gazing. trends in the global financial marketplace let me begin then with some observations on the rapidly changing global financial marketplace. it is now a commonplace that barriers between countries and financial markets, at least in developed countries, have largely disappeared, and this fact, together with new technologies, new financial instruments and new funding techniques, means that financial intermediation is increasingly global. fundamental to this trend has been the way in which advances in computer and communications technology have reduced the costs of cross - border transactions by lowering the costs of collecting and analysing data, undertaking transactions, clearing and settling payments and monitoring financial flows. and the cost reductions have been very dramatic. a recent article in the economist noted that “ the cost of a three - minute telephone call between london and new york has fallen from us $ 300 ( in 1996 dollars ) in 1930 to us $ 1