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

as mark - tomarket asset valuations and provisioning rules for loan losses. another area to receive attention under basel 3 is the possible use of macro - prudential policy adjustments to help counter pro - cyclical behaviour in financial systems. the bcbs has proposed that banks be required to build up additional capital buffers at times of rapid credit growth that could then be drawn down in times of stress. the intention of the instrument would be to lessen the impact on the economy when the boom turns to bust as well as possibly constraining excessive credit growth. a number of central banks, including the rbnz, are also looking at other macro - prudential tools that could possibly be used to help limit the extremities of the credit cycle. the challenge here is to find instruments that will actually work without imposing major efficiency costs on the financial system. prudential policy : non banks new zealand ’ s non - bank deposit taking sector comprises a number of different institutional types. the savings institutions ( building societies, credit unions and the psis ) have generally weathered the crisis well. the finance company sector, on the other hand, has faced considerable upheaval over the period since 2006, with only about a third of the companies in early 2006 now remaining active. while the global financial crisis added to the difficulties faced by the finance companies, the sector ’ s issues have been largely home - grown as a result of poor lending decisions, particularly with respect to property development lending, and inadequate capital support. while the crown retail deposit guarantee scheme has provided some liquidity protection for the sector, allowing time for the sounder institutions to rebuild investor confidence, the companies that have been unable to recapitalise or restructure have ultimately been forced to exit the industry. an amendment to the reserve bank act in late 2008 saw the reserve bank become the new prudential regulator of the non - bank deposit taking sector ; with trustees remaining the front line supervisors. since then the reserve bank has been developing a new regulatory framework and phasing in the new prudential requirements. key elements include mandatory credit ratings, connected lending limits, an 8 percent minimum capital requirement, and fit and proper tests for senior managers and directors. while these reforms are clearly too late to avert the negative consequences of earlier finance company practices, the overall aim is to raise safety standards in the sector so that the remaining players are more resilient to future business cycles. conclusion the global financial crisis had