in our te ao maori, climate risk and south pacific remittances initiatives. all of these areas directly impact maximum sustainable employment, financial stability and access to money and cash. te ao maori te putea matua, the reserve bank of new zealand, has a unique position. we are not limited to how we respond to treaty obligations, nor are we under obligation to follow how other parts of the state sector respond to theirs. however, we acknowledge that as a state sector entity that serves all new zealanders, we must recognise a special relationship with maori and the long - term nature of the maori economic eco - system. we recognise te ohanga maori, the maori economy as having a long - term presence. a recent report we commissioned, te ohanga maori 2018, the maori economy report, shows that te ohanga maori has grown in value from $ 42. 6b in 2013, to $ 68. 7b in 2018. 7 maori are an increasing proportion of the new zealand workforce, and we recognise the criticality of maori as key partners in the long term sustainability and stability of the new zealand economy. i would emphasise that te ohanga maori is not a separate, distinct and clearly identifiable segment of the aotearoa economy. it is a closely connected component of numerous pieces of the jigsaw puzzle that together make up the economy of aotearoa. as kaitiaki of the financial ecosystem we must recognise and respond to this important part of the economy. te ohanga maori is key to our legislative objectives and our strategic goals. it is closely linked with our sustainable employment and financial stability mandates by its nature, size and enduring presence. as assistant governor christian hawkesby recently explained in a speech on te waka hourua, our te ao maori strategy8 we are focusing our workplan appropriately. others are also recognising the importance of te ohanga maori. a recent survey found that funding and access to capital were two of the greatest challenges faced by maori businesses. this was supported by the productivity commission ’ s report ‘ new zealand firms : reaching for 2 / 5 bis central bankers'speeches the frontier ’. 9 we want to learn more about how factors like collective land ownership and lower home ownership, and systematic bias might be affecting the rates at which maori businesses access debt and other forms of financing. in response, we have launched a work programme to better understand maori access to capital in the new zealand economy, primarily with a focus on bank

attracted by the broad strength of the economy and our higher interest rates. over the past three years new zealand ’ s annual gdp growth has been 1. 3 percentage points higher than the average of the advanced economies2. the differential between new zealand ’ s ocr and policy rates in other advanced economies, which had been of the order of 1½ – 2 percent since 2009, began to widen in late 2013 as markets the concept of “ unjustified ” is part of the reserve bank ’ s exchange rate intervention assessment. for further detail on the reserve bank of new zealand ’ s intervention framework see eckhold, k and hunt, c ( 2005 ) “ the reserve bank ’ s new foreign exchange intervention policy ” rbnz bulletin march 2005. based on the imf ’ s 36 country classification in its world economic outlook database. bis central bankers ’ speeches factored in the prospect of ocr increases. countries that cumulatively produce around twothirds of global output have policy rates between zero and 1 percent, with most having rates close to zero. meanwhile, the reserve bank increased the ocr by 1 percentage point over the period from march to july 2014. third, and related to the previous point, the weak and uneven recovery in the advanced economies has seen many central banks adopt unconventional monetary policy as the lower bound on short - term policy rates was reached. central banks in large advanced economies have kept policy interest rates close to zero and injected over usd 6 trillion of liquidity into global financial markets. this inflated prices of financial and real assets, depressed yields and compressed spreads on risk assets. yields on 10 year sovereign bonds in germany were recently at an all - time low, france and spain reached 250 year lows and the bank of england ’ s policy rate is at its lowest level since the bank ’ s inception in 1694. the subsequent “ search for yield ” by investors, coupled with excess liquidity and low levels of financial market volatility, generated substantial portfolio inflows into new zealand and put upward pressure on the exchange rate. an additional factor exerting upward pressure on the exchange rate over many years has been the persistent gap between savings and investment. over the past forty years new zealand has demanded more investment in housing, infrastructure and other assets than its domestic savings could finance. new zealanders ’ relatively high propensity to spend means that interest rates need to be higher than elsewhere to achieve similar inflation outcomes. the higher interest rates are also needed to fill the domestic savings gap