continue to build our auckland presence – where the bulk of our regulatory interface occurs. our auckland office is ably led by an assistant governor. we have also undertaken important changes to enhance our supervisory capabilities, including launching a new enforcement department to promote compliance in regulated sectors. this is an important step as we focus on embedding a more intensive supervisory approach on the firms we regulate. our drive is to be cost effective and fit for purpose in all we do. in doing so we continue to work with a range of stakeholders, in particular through the council of financial regulators ( cofr ), on issues related to financial stability and inclusion. we have collaborative priority work streams to progress in areas such as conduct and governance, financial inclusion, climate change adaptation, digital innovation, and regulatory effectiveness and coordination. we are also actively collaborating in work on housing related matters with the treasury and the housing and urban development authority. our te ao maori strategy remains a key strategic priority for te putea matua. we have continued to ensure that the te ao maori perspective is interwoven throughout our work at the reserve bank and with our stakeholders. a good example of this is our refreshed vision and values and updated brand, to better reflect our purpose and the work we do with our partners on behalf of all new zealanders. another example is our work programme on identifying any unnecessary constraints on access to capital for maori enterprises. finally, we also maintain our focus on enabling and ensuring diversity and inclusion in our team. in line with international benchmarks we set a target of achieving a 40 / 40 / 20 gender balance ( i. e. at least 40 percent women in our workforce ), which we achieved in 2020 / 21. alongside this we have also continued to build our partnerships with maori and pacific graduate programmes. we have a long way to go, but we are committed and organised. conclusion at te putea matua, being a great team means being fit for purpose, cost effective, risk aware, and working collectively in a sustainable way. it also means being unified by our purpose – everyone knowing what to do and moving in sync in the same direction. i would like to thank our board, my colleagues and our people for their dedication, hard work, flexibility, and assistance. it is through your commitment, effort and determination that we have continued to live our purpose in supporting all new zealanders, especially during this difficult year. we are looking forward to the future. meitaki ma ’ ata 4

oecd. we have also seen consumer price inflation rise and expect it to move temporarily above 5 percent in the near term. much of this price pressure reflects the global economic impacts of covid - 19. we currently operate in a world of higher oil and energy prices, and the impact of global supply bottlenecks. the ‘ supply capability ’ of the global economy is impaired. 1 / 5 bis central bankers'speeches in addition, underlying these global price spikes are increasing domestic demand pressures, which can drive more generalised price rises and inflation. in response to the rising inflation risks, in october this year the ocr was lifted to 0. 50 % and then to 0. 75 % in november. we are one of the first central banks that have had the economic confidence to commence returning interest rates to more normal levels. the monetary policy committee expects to further remove monetary stimulus over time. it is our expectation that the ocr would eventually need to be raised above its neutral rate, conditional on the economy evolving as expected. the committee also expects to gradually unwind the additional monetary policy tools that were introduced last year. the committee stopped purchasing assets under the large scale asset purchasing ( lsap ) programme in july. we intend to manage our lsap bond holdings down in a way that maintains the smooth functioning of financial markets. more details on how bond holdings will be reduced will be provided early next year. i note that the level of government bonds on issue is a government fiscal decision. the committee ’ s decision to purchase government bonds as a means to lower interest rates is a monetary policy decision. on this note, i would like to recognise the monetary policy committee members, and the operational support of the reserve bank teams. these tools and decisions have been instrumental in our covid - 19 response. financial stability as outlined in our november financial stability report, the financial system remains resilient and is well - placed to support the economic recovery and the challenges of covid - 19. strong balance sheets for households, businesses, financial institutions, and the government going into the pandemic contributed towards maintaining a sound financial system, and yielding a faster economic recovery than following previous deep recessions. however, strong demand for housing has pushed house prices above their sustainable level, increasing the chance of a correction. recent buyers are borrowing more relative to their income, and are now vulnerable to higher mortgage rates or a fall in house prices. one of the persistent drivers of higher house prices, and asset values