is a reasonable expectation for new zealand ’ s growth, to identify some of the factors that will determine whether we are able to achieve that potential, and to discuss the linkage between growth and the reserve bank ’ s interest, namely inflation. running the economy is like running a marathon let me start by reminding you of the challenge facing a marathon runner. the objective is to go as fast as possible over the full distance. it makes no sense to sprint, ‘ hit the wall ’, and simply not finish the race, or spend much of the time on hands and knees recovering from that initial bout of excessive enthusiasm. nor does it make any sense to walk most of the way, finishing the race with unused reserves of energy. neither approach is likely to lead to running the race in a personal best time. and that is why experienced athletes constantly check their pace, making sure it is neither too fast nor too slow. in terms of an economy, going too fast also leads to ‘ hitting the wall ’, with symptoms typically being a burst of inflation, a deterioration in the balance of payments position, perhaps an asset price boom, signs of difficulty in finding skilled employees, and very often a sense of euphoria ( ‘ look how fast i ’ m going and i still feel good! ’ ). the results of hitting the wall are typically a sharp recession - - sharper still if overcooked asset prices are collapsing. to complete the analogy, in any long distance race you will find several runners who have paced themselves correctly, but who complete the race in very different times. each may have done a personal best time, but those personal bests will be very different. so it is with economies. some economies will be able to sustain a much faster pace than others without running into the too - fast danger territory ; some will naturally grow more slowly than others, without leaving large amounts of unused energy or potential. and it is not necessarily a question of one economy being better than another ; it ’ s just a question of being different. if that thought surprises, i ’ d simply note that the ‘ best ’, most highly productive, economy in the world - - the united states - - is also one of the slower growing economies, and has been now for some decades. what is it that determines why some economies can achieve sustainably faster growth than others? potential growth ultimately depends on two things : quantity and quality. the quantity of people and capital, in the form of factories, forests,

they can get a wider range of better and cheaper financial products and services. our vision is to put the interest of the consumer, competition, security and trust between stakeholders at the centre through european legislative initiatives. 1 / 2 bis - central bankers'speeches last but not least, the fight against payment fraud is also a leading priority in the bnb supervisory practice, and i believe that the new european legislation will enable payment service providers to share fraud - related information with each other. this will increase consumer awareness and expand refund rights for those consumers who are victims of fraud. the new european legislation will also ensure levelling of the playing field between banks and non - bank payment service providers, and in particular by giving non - bank payment service providers access to all eu payment systems. this process will go hand in hand with setting appropriate adequate safeguards in order to ensure the right conditions for the entry of innovative financial services. thank you for your attention! 2 / 2 bis - central bankers'speeches