sized dairy downturn, but many indebted farms might not. what are we doing, as te putea matua, about the challenge of competing horizons and purposes when it comes to ensuring financial stability? on top of keeping inflation low and stable so businesses can focus on the long - term, we also look at other ways to maintain a healthy financial system. it is known that banks will be better incentivised to think about the long - term performance of the businesses they lend to, if they have more of their own equity at stake ( i. e. more of their own skin in the game ). this is why we are proposing to significantly increase the minimum capital requirements for banks operating in new zealand28. an increase in bank capital benefits all new zealanders by creating a safer banking system and longer - term lending consideration. this topic should be of special interest to some of you who are managing collectively owned assets. since it is difficult for a bank to foreclose on a collectively owned asset, lending to such organisations is considered unsecured, and therefore more expensive. this makes it more difficult for you to get access to bank lending. in the short - term, less access to credit puts businesses with collectively owned assets at a competitive disadvantage to their industry counterparts. they have less funding optionality. these businesses also remain exposed to economic downturns which can be exacerbated by excessive lending to other competitors in the same industry. 27 based on credit conditions survey and financial system analysis review of the capital adequacy framework for registered banks : how much capital is enough? ref # 8528795 in the longer - term, businesses operating with collectively owned assets have lower leverage ratios than their industry counterparts as a result. lower leverage brings greater resilience to economic shocks and longer - term sustainability. this means, in the longer - term, maori businesses with collectively owned assets can have a stabilising effect on the economy as a whole. i know for some of you, any progress to change this situation is too slow. in the meantime, i would encourage you to take advantage of the opportunities that come with greater resilience, and look for partnerships that value long - term outcomes. in summary, the challenges ahead will still test your skills and adaptability : the global economic environment is volatile as trade tensions persists ; commodity price swings will continue to test resilience ; evolving consumer tastes and preferences are fast - moving and we need to move

its list of eligible collateral, providing the funds on a full allotment basis and extending the maturity of its operations. this has been of significant benefit to our own banks and, indeed, other banks throughout the system. euro area monetary policy in response to the turmoil, and the associated impact on the real economy, central banks in all the major economies, including the eurosystem, have eased monetary policy, in many cases to levels not previously seen. in this regard, the governing council of the ecb has cut its policy interest rate by 2 ¾ per cent since the beginning of last october. despite tensions in financial markets, this has had a significant impact on interest rates at the retail level. of course, uncertainty concerning the economic outlook remains very high and, as always, the governing council will continue to monitor closely all developments. you will also be aware that some central banks have also started to engage in more non - standard monetary policy operations, such as the outright purchases of private and public assets. i should mention that the ecb is currently studying possible non - standard monetary policy measures. contributing to financial stability through the formulation and publication of financial stability assessments, central banks in the major industrial countries draw attention to risks to the financial system. in our annual financial stability reports, quarterly bulletins and other public statements, the central bank has highlighted risks to financial stability. the major risk was identified as the interaction of a significant international shock and certain vulnerabilities in the domestic economy relating, for instance, to property prices, credit growth and the extent of the banking sector ’ s reliance on wholesale funding. however, our financial stability reports and the warnings they contained, no less than those in similar reports issued by other central banks, were not as effective as they might have been as they did not lead to a sufficient or timely change in behaviour. but for the massive deterioration in the external environment, these risks would have been more manageable, albeit with difficulty. financial regulatory architecture in the light of the crisis over the past two years, there is recognition that the architecture of financial regulation and supervision, both here and internationally, needs broad - ranging review and reform within the european union ( eu ), the european commission ’ s high - level group on crossborder financial supervision, chaired by jacques de larosiere, has completed an urgent review of financial supervision in the european union and reported its findings two weeks ago. this group was mandated to consider the future of european supervision and regulation in light of