our engagements with all stakeholders. … including the minister of finance of course, as i have already recognised, our key stakeholder is the minister of finance. to get the best out of that relationship, we need to continue to understand government priorities and our contribution to the broader economic wellbeing of new zealanders. but we also want the minister to understand and support our objectives, respect the reserve bank for its advice, and hold us to account for our performance. our role is to make sure the minister has the information he needs to do that. this is also means working closely with the treasury who will be acting as monitor on the minister ’ s behalf. conclusion the view from tane mahuta is of a garden that continues to grow and evolve. we have to adapt and evolve with it – in terms of our inclusiveness, our commitment to fostering honest, professional and constructive relationships with our stakeholders, in identifying emerging risks like climate change, and working with our international partners. ref # 8108464 v6. 6 at the same time, the government is modernising our legislative framework. our new financial stability objective gives clarity to our prudential purpose : a dynamic and efficient financial system that contributes to a sustainable and productive economy and promotes the prosperity and wellbeing of new zealanders. the creation of a new governance board will increase transparency and accountability. it will also increase the diversity of thought that goes into our decisions. the board will delegate responsibility to the governor and management, establish the framework of expenditure and investment delegations to management and hold management to account for achieving the vision. as governor and chief executive, i will certainly feel the difference – being answerable directly to a board with the formal responsibility for all the work of the reserve bank, except the decisions of the monetary policy committee. our staff can be proud to be part of the best team, in a great central bank. a reserve bank that recognises their experience and backgrounds, supports them in developing their skills, and encourages them to work together to build strong and respected relationships with our stakeholders. i hope stakeholders like you will also notice the difference. the new governance board will be clear about what the organisation is trying to achieve. importantly this means setting the strategic direction and risk appetite of the reserve bank across all our functions. as mentioned earlier, our regulated population can expect us to be more intensive in our regulation and more intrusive in our supervision. i have been happy to outline this vision for the reserve

economy – is the huge number of non - performing loans. there is an ongoing debate in cyprus about how the country will handle this problem, a debate which practically “ freezes ” the last review of the cypriot economic adjustment programme. do you see any signs of a derailment of the cypriot programme? what might be the effects on the banking system? cyprus has a remarkable track record in implementing the conditionality of the programme. one of the key objectives of the programme is to reduce the high level of non - performing loans and restructure the excessive indebtedness of the private sector. this is a key condition for the banking system to be in a position to finance economic growth and job creation. in this respect, a swift adoption of the insolvency framework and application of the foreclosure framework are not only key elements to guarantee compliance of cyprus with the programme, but also essential to support the economic recovery. bis central bankers ’ speeches the main political goal of the government is to conclude the programme and the financial assistance provided by the troika earlier, probably before the end of this year. the ecb is part of the troika. as such, does it consider this goal achievable? whether or not there should be a follow - up arrangement is for the cypriot government to decide. what matters to the ecb is to establish the conditions for sustainable growth and for a lasting return of cyprus to market funding when the programme ends, i. e. in the spring of 2016. to this end, it will be essential that the banking sector has turned the corner and the non - performing assets have been addressed. the ecb is starting its programme of quantitative easing ( qe ). how and when can cyprus benefit from that? cyprus should and will benefit from our asset purchase programme. this will be possible whenever the review is successfully concluded. many analysts interpret qe as europe ’ s first step away from austerity programmes and towards more growth - friendly policies. i also read that inflation is the safest way for european countries to reduce their debts and the ecb will help them move in that direction with its qe. in that respect, is qe a programme created as a result of economic need, of political pressure, or as a result of fear for the future of the euro? the ecb ’ s sole mandate is to maintain price stability for the euro area as a whole, which we define as consumer price inflation being below