_ _ _ _ 15 callaghan et al. ( 2023 ) explain the interactions between settlement cash, the crown settlement account, and the reserve bank. 16 see the consultation on deposit takers core standards, and information on digital cash. the appeal of a ‘ hybrid ’ approach to liquidity provision approaches to liquidity provision have begun to be characterised in the central banking community as ‘ supply - driven ’, ‘ demand - driven ’, or a ‘ hybrid ’ of the two. 17 in a supply - driven approach, the central bank determines the quantum of liquidity required and supplies that amount. this essentially reflects the rbnz ’ s current approach and in our case is largely achieved through transacting in the fx swap market. we do not currently foresee a need to use additional asset purchases to form part of our supply - driven toolkit as is being contemplated in other jurisdictions. in a demand - driven approach, the central bank provides cash through regular collateralised lending operations or standing facilities. in the new zealand context, a feasible way to do this would be through our existing open market operations. 18 we believe that the most pragmatic and flexible way to provide liquidity in new zealand is to use a hybrid approach, combining supply - and demand - driven elements. this should require only a modest adjustment to our current framework. there are 3 main reasons we think a hybrid approach makes sense for new zealand : 1. the use of fx swaps for monetary policy implementation ( mpi ) the first is because of the relevance of fx swaps for monetary policy implementation in new zealand. implementing monetary policy means keeping short - term wholesale interest rates trading close to the ocr. in new zealand, that has increasingly meant keeping short - term fx swap implied interest rates trading close to the ocr, due to the relative lack of activity in the domestic interbank and repo markets. to transact on both sides of the fx swap market – that is to be able to add and withdraw new zealand dollar liquidity – we need to maintain a stock of liquidity management reserves. the act of raising those reserves itself injects new zealand dollar liquidity as we fund the purchase of reserves through the creation of settlement cash. in this way, the structural balance of our liquidity management reserves can be thought of as a supply - driven element of our liquidity provision. around that structural level of liquidity provision, our portfolio management team can make tactical adjustments to add and withdraw liquidity to meet

over time the irish policy has been tailored to address 2 / 7 bis central bankers'speeches both the collateral ( lvr ) and serviceability ( loan to income ratio ( lti ) ) dimensions of borrower risk, with separate limits on each dimension for different categories of borrowers. the flexibility of the policy means the central bank can proactively respond to risks it sees in different segments of the mortgage market. the cbi commits to annually publish a review of the effectiveness and calibration of its macro - prudential policy. 2 in the bank of england ’ s case, they place a limit on high lti lending. this is seen as an ‘ insurance ’ policy, with the calibration currently set at a non - binding level. the aim of the measure is to prevent a deterioration in lending standards, not necessarily to actively lean against mortgage lending at present. 3 in a similar vein, the uk financial policy committee ’ s approach to setting the ccb is to maintain it at a positive, neutral level, and to stand ready to either raise or lower it in line with the committee ’ s assessment of aggregate risks to the system. 4 further the ccb is seen as an important signalling device – underlining the fpcs view on the evolving shape of systemic risk in the uk system. we should also consider the evidence and analysis of the imf and other international bodies which have reviewed macro - prudential experiences across a number of countries. 5 while few macro - prudential regimes have been tested through a full financial cycle, evidence suggests that macro - prudential policies have limited success in leaning against asset price and credit growth cycles, particularly during strong upswings. the key benefit of capital and borrower - based macro - prudential tools is from the buffers they create which help to build system resilience against potential shocks. regarding the shape of operating and governance frameworks for macro - prudential, there is no clear convergence on operating models and the sharing of responsibilities between different parts of government. however, there is a growing consensus on the desirability of : a clear assignment of the macro - prudential mandate and powers ; well - defined policy objectives that are modest as to what macro - prudential policy can and should achieve ; the need for high quality analysis and monitoring of systemic risks to support decisionmaking ; and transparency and accountability mechanisms that support policy legitimacy. taken together, these elements of a macro - prudential