. in making that report, we interviewed 42 capital seekers from a cross - section of the maori economy and financial sector. 9 they all shared similar experiences. the key themes raised from the discussions were a shortage of data on maori businesses, the complexity and opaqueness of the funding landscape, difficulties lending on maori land, and a lack of leadership across the ecosystem to address access barriers. from the financial sector engagements, it was clear that there was a lack of understanding of maori business values and models. there was also a general agreement that new zealand ’ s capital market falls well short of meeting the capital needs of maori business. at the reserve bank we take these issues seriously. under our act, our core purpose is to enable the prosperity and wellbeing of all new zealanders. in part response, we have developed a strategy to incorporate te ao maori values and perspectives into how we work. 10 this includes publicly releasing our te tiriti statement. 11 our commitment recognises our legislated purpose, and the constitutional and legal significance of te tiriti o waitangi. our approach reinforces the importance of ensuring that maori are enabled by new zealand ’ s financial system, as are all new zealanders. beyond getting our own house in order, we have broader work streams underway, both under the umbrella of “ financial inclusion ”, and our strategic themes outlined in our statement of intent. our strategic themes are trust, resilience, competition and efficiency, inclusion, leveraging data and technology, and people front and centre. 12 _ _ _ _ _ _ _ _ _ _ _ _ reserve bank of new zealand. ( 2018 ). te ohanga maori 2018 : the maori economy. https : / / www. rbnz. govt. nz / - / media / project / sites / rbnz / files / research / te - ohanga - maori - report2018. pdf berl. ( 2019 ). the future maori workforce : part three. berl. the future maori workforce - part three, berl ministry for primary industries. ( 2013 ). growing the productive base of maori freehold land. https : / / www. mpi. govt. nz the reserve bank of new zealand ( 2022 ). improved maori access to capital issues paper ( rbnz. govt. nz ) the reserve bank of new zealand ( 2022 ). improved maori access to capital issues paper ( rbnz. govt. nz ) reserve bank of new zealand. ( 202

for example, are now well understood and widely recognised as increasing economic flexibility and the productivity of capital. more recently global financial systems and the newer asset markets appear also to have withstood several recent shocks, such as september 11, the dotcom bubble, the gm related wobbles in may 2005, refco, and the iraq war. the fact that some investors, such as hedge funds, are willing to take on greater risk does not necessarily give rise to system - wide concerns. systemic risk in modern financial systems but there are limits to the amount of risk that can be hedged away. the financial system cannot reduce the amount of risk in the economy, but only repackage and transfer it. as more instruments that transfer risk are added to the balance sheets of financial institutions, so leverage and connectivity grow. while some of these connections might constitute a " perfect hedge ", they can leave the system more vulnerable to both counterparty risk and the liquidity of these markets. the precise extent to which market participants are now connected through interlocking obligations is difficult to gauge, but the uk interbank market provides some clues. over 70 % of the total lending in the market is accounted for by 15 institutions. and the major uk banks ’ large exposures to the main foreign - owned lcfis are almost two - thirds of tier 1 capital. the rising correlation between the share prices of major uk banks and foreign - owned lcfis also provides a hint of the growing interconnections ( chart 4 ). at the same time, rapid innovation in new financial instruments poses challenges within the financial system. as i have already discussed, these developments are likely to be positive in the long run, allowing market participants greater scope to diversify and manage risk. but in the short run, newer products, such as structured credit derivatives, do pose challenges. we simply do not have experience of how they behave in the full range of market conditions. the models that have been built by banks and other players in the market to value and hedge positions in these instruments are more sophisticated than ever before, but they are not proven in adversity. the infrastructure to support credit default swaps, the building blocks of many of these new products, is developing rapidly thanks to the initiative of the fsa and the new york fed but there is still some way to go. competition between financial firms to establish positions in these new and fast growing markets is also rising. the business risk not just of losing profits