small open advanced economies come to an end due to one or more factors : • global economic growth weakens or slows in major trading partners and affects the terms of trade and export growth ; • a major domestic policy correction is needed to address a deteriorating fiscal or current account deficit ; • long - term interest rates rise significantly in response to offshore movements triggered by higher inflation expectations and / or increased risk premia in major economies. alternatively, domestic short - term rates may need to rise sharply to moderate inflation pressures associated with growing supply and demand imbalances. the main risks to the current expansion lie with future developments in the global economy, and a deterioration in the imbalances in the domestic housing market. i ) global risks on the downside, the main risks are : • the euro - area economy remains subdued or deteriorates, with consumer and business confidence affected by developments relating to brexit, migration and anti - globalisation sentiment ; • the incoming us administration follows through on pre - election rhetoric relating to trade barriers, and abandons or renegotiates existing trade agreements ; • economic growth in china slows following a period of financial disruption linked to the very rapid build - up in corporate ( mainly soe ) debt over the past 7 years, and a rising level of bad debts in the formal and shadow banking sectors. the main upside risk is that the us economy in 2017 grows more rapidly than the 2 2¼ percent growth currently projected by the imf, oecd and bis, due to substantial personal and corporate tax cuts and a large increase in infrastructure spending ( with no major moves to raise trade barriers ). ii ) risks in the domestic housing market numerous measures indicate that new zealand house prices are significantly inflated relative to usual valuation indicators. imf data show that new zealand had the third highest real increase in house prices among 64 countries in the year to june 2016. 7 new zealand also had the greatest deterioration in the median house price to median income ratio of 31 advanced countries in the period 2010 to mid - 2016. 8 oecd data indicates that, relative to their long - term averages, new zealand has the highest house - price - to - rent ratio, and the second highest house - price - to - income ratio among the oecd economies. 9 several cross - country studies have assessed the economic implications of housing market downturns. this research tends to show that almost half of the housing booms end in a bust, with downturns lasting

financial system is not just to avoid and mitigate periods of instability, but to enable an environment that promotes the prosperity and well - being of new zealanders and contribute to a sustainable and productive economy. we do this by seeking a strong, efficient, innovative and inclusive financial system, consistent with our financial policy remit. central banks around the world continue to contribute towards improving financial inclusion, defined as individuals and businesses having access to useful and affordable financial services delivered in a responsible and sustainable way. globally, initiatives from central banks include delivering inclusive payment systems, factoring inclusion into regulatory settings, collaborating with public and private networks, delivering financial literacy programmes and undertaking research to fill evidence gaps. financial stability is the highest contribution te ptea matua can make to financial inclusion. a well - functioning financial system with low probability of insurers and deposittakers getting into trouble increases the likelihood that people can access, and have trust in, the products and services they rely on. financial inclusion can also contribute to stability. providing financial services to a larger customer base can promote a higher share of customer deposit funding, contributing to stability. inclusion efforts, such as increased lending to smaller firms, can also help to diversify asset portfolios and reduce the relative size of any single borrower. a review of 2, 600 banks in 86 countries found a higher level of inclusion contributes to greater bank stability, particularly in countries with strong institutions and sound regulatory settings. we explore this further in an excerpt from our may 2023 financial stability report that we are pre - releasing today. our kimihia te mea ngaro – mori access to capital programme was launched to better understand mori access to capital in the new zealand economy and bring a more deliberate approach to financial inclusion. an efficient, effective, and stable financial system is one where capital is allocated on the basis of risk and return, one in which there is equitable access to capital for all firms, including mori firms. since we released our issues paper on mori access to capital in august 2022, we have been working with retail banks to find solutions, including working collaboratively on how banks assess lending against whenua mori, which has the potential to improve access to capital for mori landowners and collectives. similarly, our future of money – te moni anamata programme has been working to ensure that the money we issue as a central bank continues to enjoy trust and confidence and promotes financial and social inclusion. the devastating impact of cyclone gabrielle highlighted the lack of resili