of the bank ’ s history, advisory committees have been a key element of this process. since 2013, the bank has given a greater role to committees in monetary policy decision making. the governing committee works together to reach a decision on the appropriate setting of the ocr and the key contents of the statement. a further important element of the bank ’ s decision - making process is the opportunity for constant review. since the financial crisis, inflation has persistently been weaker than forecast, and the bank has continually reviewed its forecast performance over this period. recent research has shown that the bank ’ s forecast performance has been reasonable when compared to a number of benchmarks. this suggests that there were no obvious major sources of new information that the bank could have used from these benchmarks in its decision making. even so, the persistent period of weaker - than - expected inflation remains a focus for the bank, and the bank ’ s research program is shedding light on the drivers of low inflation. increasing our understanding of low inflation is a strategic priority for the bank. see : richardson and williams ( 2015 ), ‘ estimating new zealand ’ s neutral interest rate ’, reserve bank of new zealand analytical note an2015 / 05 ; armstrong ( 2015 ), ‘ the reserve bank of new zealand ’ s output gap indicator suite and its real - time properties ’, reserve bank of new zealand analytical note an2015 / 08 ; lewis, mcdermott and richardson ( 2016 ), ‘ inflation expectations and the conduct of monetary policy in new zealand ’, reserve bank of new zealand bulletin, vol. 79. no. 4. march 2016. see : armstrong and mcdonald ( 2016 ), ‘ why the drivers of migration matter for the labour market ’, reserve bank of new zealand analytical note an2016 / 02 ; vehbi ( 2016 ), ‘ the macroeconomic impact of the age composition of migration ’, reserve bank of new zealand analytical note an2016 / 03. see karagedikli and mcdermott ( 2016 ), ‘ inflation expectations and low inflation in new zealand ’, reserve bank of discussion paper series 2016 / 09. bis central bankers ’ speeches

for monetary policy to sustain the domestic conditions for price stability. financial systems are substantially stronger. bank capital ratios now provide a significantly larger cushion against potential losses – though capital ratios in asian banking sectors are still generally lower than those in other emerging economies. the quality of bank assets has improved. nonperforming loans, estimated to have peaked at between one - quarter and three - quarters of total loans in the crisis countries, are now under 10 percent of total loans. financial institutions that required government intervention have largely been restored to private ownership. domestic capital markets are an increasingly important channel of intermediation in financial systems that had historically been dominated by banks. these are impressive achievements by any measure. and the changes that have taken place provide a strong foundation for future growth and they make it much less likely that these economies will be vulnerable to the type of crises of a decade ago. this progress is reflected in a broad range of financial market indicators of risk. risk premia in domestic interest rates markets are low. spreads on remaining dollar - denominated debt have fallen to levels that reflect little concern about future financial stress. it is important to bear in mind that some of the most dramatic changes in the performance of asian and other emerging market economies have taken place in an unusually benign economic environment. the past four years have marked the strongest sustained period of growth for several decades. global interest rates have been relatively low. asset prices in many markets have been rising for a sustained period of time. volatility in equity, interest rate and foreign exchange markets has fallen to unusually low levels, and although we ’ ve seen the occasional sharp correction in some markets, recovery has typically been quick. these favorable conditions make everything look somewhat better than it otherwise would. but the improvements in asia are real, and they will make the region more resilient in the face of future challenges. the challenges ahead even with the relative prosperity of the recent past, policy in much of the region reflects substantial ambivalence about the risks that come with financial openness. the memory of the trauma of the crisis explains much of this ambivalence. the difficulties in managing this more recent period of substantial capital inflows provides an additional source of unease. policy regimes across the region are to a significant degree directed at providing some insulation for the domestic economy from what is considered a volatile global financial environment. this impulse reflects itself in many different ways. it is manifested in exchange rate regimes that still permit relatively limited variability against the dollar