no one will gift growth to us. some things we know work ; others we suspect might. but in other areas, we simply have no idea whether we are hurting or helping ( or neither ) the cause of growth. often it seems that the pre - conditions for growth are laid down across decades, perhaps centuries. if so, they are hard to lose, but also hard to gain. in many respects, government policies and private sector practices are very different in, say, the united states and germany – and yet both are wealthy, growing, economies. and no matter what the policy regime, the countries of west africa, for example, are likely to be desperately poor for decades to come. probably a few things matter a lot, and a lot of things matter a little. unfortunately, it is often easiest to do something about things that won ’ t do very much to boost long - term prospects. some things we simply can ’ t change. geography matters, and drawing a circle centred on christchurch with a radius of 2100 kilometres will always encompass only a few million new zealanders and a lot of seagulls. similar circles centred on dublin, helsinki, or singapore encompass hundreds of millions of people. that harsh fact makes it all the more important that we get right what we can influence. what else matters? first, and to go back to the history i started with, we can say confidently that knowledge matters. that has rarely been more obvious than over the past few years in the united states. as we speak, the us economy is on the verge of breaking all previous records for uninterrupted growth – by next month, a record 107 months. during the 1990s, many think that the sustainable medium - term growth rate of the us economy has risen from around 2. 5 per cent in the early 1990s, to around 3 or even 3. 5 per cent today. in large part, that increase reflects the extraordinary developments in information technology in recent decades that are now coming to fruition. record - high share prices year after year do raise questions about how much is sustainable, but the change in the underlying technology is real and will not be lost – it is transforming the us, and indeed the entire developed world. so knowledge matters, and it will matter increasingly. we need people with ideas and innovations, and entrepreneurs to help convert those innovations into successful businesses. but we also need social attitudes that encourage both ideas and enterprise, and financial markets that support and sustain that enterprise.

stability role ( sections 1a and 68 of the act ) are focussed on “ promoting the maintenance of a sound and efficient financial system ”. the bank is also required to have regard to any statement of government policy on the bank ’ s functions issued by the minister ( section 68b ). the objectives and policy guidance for macro - prudential are consistent with this but more specific. the current mou objective is : “ to increase the resilience of the domestic financial system and counter instability in the domestic financial system arising from credit, asset price or liquidity shocks. ” guiding principles for macro - prudential in the mou include the principle of supporting monetary policy where possible and being fully consistent with micro prudential policy. the objective and guidance from the mou should be lifted into the act and potentially enhanced, for example with the principle that macro - prudential policies should be applied uniformly across all banks. further elements of the governance regime might include : a list of areas that macro - prudential policies could be applied to8, e. g. capital, loan to value ratios, debt servicing capacity ; and potentially a pta - like document that would express operational objectives agreed from time to time with the government of the day. i expect the technical details of the macro - prudential instruments would continue to be set out in the banking supervision handbook. the specific characteristics of macro - prudential that i have mentioned the common ground with micro - prudential policy and its stabilisation role point to the macro - prudential mandate remaining with the reserve bank. there are significant synergies across the micro and macroprudential functions, and the stabilisation aspect requires a macro - analysis capability and degree of coordination with monetary policy. the imf in its 2017 fsap report underlines this point and supports the reserve bank having responsibility for macro - prudential – but with full accountability. they point out that shared responsibility models, where macro - prudential decisions are made jointly by councils ( e. g. made up of the ministry of finance, central bank and regulatory agencies ), often suffer from inaction bias. 5 / 7 bis central bankers'speeches an important further aspect of governance is decision - making. given the planned introduction of a new decision making committee ( mpc ) for monetary policy, the review should consider establishing a financial policy committee ( fpc ) for decisions relating to both micro and macro prudential policy.