be unpopular with the regulated industries ( the agents ), which can be noisy at times. we insist on an adequate capital buffer to absorb losses, internal capability to manage the shop, and ‘ skin in the game ’ via directors attesting to these factors. we also insist on transparency so that customers and competitors can keep an eye on each other. likewise, for the large, systemically important, banks we insist on failure management capabilities – where we can step in and keep the bank going so that the whole system doesn ’ t fail. we can also be unpopular with wider new zealand, as shifting interest rates and / or implementing and altering the loan - to - value ratio that banks are allowed to lend at, are often not immediate vote winners. these activities directly cut across our human instinct for instant gratification, despite in the long - run maintaining a stable financial system and reducing the scale of financial volatility and / or crises. we aren ’ t here to win votes, but we are aware that our stakeholders are demanding more from us, and we are responding. as a result, we have developed a new vision for the bank, we want to be a great team, best central bank. all of our strategic priorities work towards this goal. we have visualised ‘ our island ’ that we will always move towards on the horizon, one that all new zealanders can be proud of and that tane mahuta – our bank – can stand tall on. to reach ‘ our island ’, we need to be aware of the long - term forces shaping the global economy, the very things we have just been talking about. these factors will have a significant impact on the allocation of resources, and the future wellbeing and stability of the new zealand economy. we are embarking on, amongst other things, our own climate change strategy – focused on our own activities as well as our regulatory duties with concern for financial stability. we need to factor climate change issues into our concern for financial stability and efficiency. to be most effective, we are committed to working cooperatively on these issues, in particular harnessing the new zealand council of financial regulators ( cofr ) to provide longer - term leadership. cofr includes the bank, the treasury, the financial markets authority, and the ministry of business, innovation and employment. as part of our commitment, the cofr are discussing their own ‘ island ’ or vision, so as to best identify work effort and prioritisation – moving beyond

broken down by activity ; detailed information on the ownership of deposits ; information on the holders of government paper ; information on tax yields, import breakdowns, agricultural yields, etc, etc. we should mine this data for practical insights about how our economy works. we need to address the data with a variety of parametric techniques, ranging from charts and tables to econometric modelling, and covering the whole gamut of tools and approaches. we should avoid over - emphasis on technique, and we must devote more resources to structural models of the economy, such as the central bank still employs for forecasting, and less to simplistic models which reduce complex economies to a handful of equations. we need to be flexible in our approaches, and to develop a greater humility in our analysis. we must stop saying that this or that theory has been “ proven ”, or this or that policy has “ worked ”. in the physical sciences, where they actually have methodologies that can prove things, they acknowledge that the proof is valid only until evidence that contradicts it emerges ; proofs in the physical sciences are not forever. in economics, where we have no tools to prove anything, we are too fond of ex cathedra pronouncements. we must stop saying that the world is what our theory tells us, and learn to see things as they really are. there is exciting new research in economics which draws on the knowledge and insights of other disciplines, including finance, psychology, ethics, law, cognitive sciences, and others. hopefully we will also see a resurgence of interest in philosophy and epistemology. we should all seek to broaden our own research into areas such as these in search of useful insights and guidance for policy. in the case of the central bank, i hope this will be reflected in increasing contributions to this seminar from members of all departments of the bank, not only the research department, and in joint research that crosses disciplinary boundaries. these are exciting times for economics, and for economists and central bankers. we have a chance to contribute to the changes in approach to research and analysis for policy, we have a rich store of data from which to draw insight, and relevant analytic expertise is increasingly spread across the bank, and in disciplines outside of economics. let us maintain our focus on policy, and let us draw on the knowledge and expertise of our colleagues throughout the bank, and in related disciplines, to help in the search for deeper insight into our evolving economies.