ensure adequate access to liquidity for settlement purposes. work on access and governance issues with regard to the payment system also continues, and we will continue to pursue more rapid progress in this area. " ownership of banks in new zealand is dominated by overseas investors. foreign ownership has brought many benefits, including scale and scope, to our banking system. however, it also has resulted in a banking system with concentrated ownership that is tightly tied to australian financial stability. the reserve bank, therefore, attaches a high degree of importance to monitoring developments in australia and to our relationship with the australian regulator, apra, and our work within the trans - tasman banking council set up last year. " the two governments have agreed to legislation to require the reserve bank and apra to consider the effects of their own regulatory actions on financial system stability in the other country. a statutory manager or administrator would have to inform the local regulator if they felt that actions might be detrimental to financial system stability in the other country. work is underway on these proposed trans - tasman legal amendments. these changes should help australian banks meet new zealand outsourcing requirements. " there is more work to do. next, the council proposes to focus on crisis management preparation. this will build on existing arrangements to enhance the ability to respond to a trans - tasman banking distress situation. " a foreign - owned bank will inevitably be focused on long - term returns to its ( mainly foreign ) shareholders. but new zealand's liberal attitude to bank ownership should not be misconstrued as giving away our interest in the new zealand financial system. our focus is on regulation to ensure financial stability for new zealanders. "

have not overreacted and remained cool - headed. this is a positive sign. central banks, including the eurosystem, have reacted decisively to the situation with liquidity provisions and other measures. german banks do not report liquidity problems. the german financial system is stable and over the past years its resilience against adverse shocks has markedly improved. moreover, the universal banking model – a characteristic feature of the german financial system – has proven its robustness and stability. these structural achievements will help to cushion current tensions due to higher perceived counterparty risk and a necessary unwinding of positions on the market for credit risk transfer – both unavoidable outcomes in the face of an insolvency of one of the major market participants. the financial turbulence has created the most challenging situations for financial intermediaries, for central banks, for supervisory agencies, and for regulatory bodies in decades. and since the causes of the crisis are deeply rooted, a comprehensive coordinated response at the international level is evidently warranted. in this context, the financial stability forum – the fsf – in particular is playing a crucial role in the process of mitigating the ongoing difficulties and making the financial system more resilient to future shocks. the fsf was established in 1999, following a report by the then bundesbank president, hans tietmeyer. the fsf brings together senior representatives of national financial authorities ( for example, central banks, supervisory authorities and treasury departments ), international financial institutions ( such as the imf or the bis ), international regulatory and supervisory groupings ( for example, basel committee on banking supervision, international accounting standard board ), committees of central bank experts ( such as the committee on the global financial system ) and the european central bank. the fsf ’ s mandate is to assess vulnerabilities affecting the international financial system, to identify and oversee action needed to address these, and to improve coordination and information exchange among the various authorities responsible for financial stability. in doing so, the fsf aims to promote international financial stability, improve the functioning of financial markets, and reduce the tendency for financial shocks to spread from country to country, thus destabilising the world economy. the fsf seeks to give momentum to a broadbased multilateral agenda for strengthening financial systems and the stability of international financial markets. the necessary changes are enacted by the relevant national and international financial authorities. in a nutshell, the fsf acts as a central hub for all