- hauser. pdf jones, b. ( 2023 ). bagehot and the lender of last resort - 150 years on. presented at the 36th australasian finance & banking conference. retrieved from https : / / www. rba. gov. au / speeches / 2023 / pdf / sp - ag - 2023 - 12 - 14. pdf kengmana, b. ( 2021 ). ramped up : rbnz ’ s additional monetary policy toolkit. rbnz bulletin, 84 ( 1 ), 1 – 32. retrieved from https : / / www. rbnz. govt. nz / hub / publications / bulletin / 2021 / rbb2021 - 84 - 01 kent, c. ( 2024 ). the future system for monetary policy implementation. in reserve bank of australia. presented at the bloomberg australia briefing. retrieved from https : / / www. rba. gov. au / speeches / 2024 / sp - ag - 2024 - 04 - 02. html parekh, s. ( 2016 ). how the reserve bank of new zealand manages liquidity for monetary policy implementation. reserve bank of new zealand bulletin, 79 ( 9 ), 1 – 19. retrieved from https : / / www. rbnz. govt. nz / hub / publications / bulletin / 2016 / rbb2016 - 79 - 09 reserve bank of australia. ( 2024 ). how the reserve bank implements monetary policy. retrieved august 26, 2024, from reserve bank of australia website : https : / / www. rba. gov. au / education / resources / explainers / how - rba - implements - monetarypolicy. html reserve bank of new zealand. ( 2022a ). in retrospect : monetary policy in new zealand 2017 to 2022. reserve bank of new zealand. retrieved from reserve bank of new zealand website : https : / / www. rbnz. govt. nz / hub / publications / monetary - policy - statement / rafimp reserve bank of new zealand. ( 2022b ). facilities at a glance. retrieved august 26, 2024, from reserve bank of new zealand website : https : / / www. rbnz. govt. nz / financial - markets / domesticmarkets / our - monetary - policy - implementation - framework / key - facilities / facilities - at - a - glance robinson, f., & watson, d. ( 2024 ). in

24 may 24 aug 24 overnight general collateral repo rate ( rhs ) source : bloomberg, rbnz estimates prior to the pandemic our framework included the use of tiered esas remuneration as a means to ensure distribution of liquidity with a targeted settlement cash level. as we are no longer targeting an explicit settlement cash level, a return to a tiered remuneration approach would create added and potentially unnecessary complexity. however, we retain the ability to adapt our framework at any time as needed to support our objectives. should distribution of settlement cash within the system become an issue, it is always possible for us to look at tiering again. an aside on shrinking our balance sheet while interest rates fall as you are no doubt aware, the monetary policy committee has started to ease the restrictiveness of monetary policy in new zealand. simultaneously, our additional monetary policy ( “ amp ” ) tools are continuing to roll off the balance sheet. a natural question people might ask is whether the mpc is intending to continue with balance sheet reduction during an easing cycle. the answer is yes. the wind - down of the large scale asset program ( “ lsap ” ) is consistent with the mpc ’ s stated objectives of minimising impact on monetary stimulus ; avoiding harming the efficient functioning of financial markets ; and ensuring the mpc has the capacity to use the lsap tool effectively again, if it were ever warranted. we do continue to monitor for any impact, but the normalisation of our balance sheet is generally not indicative of our monetary policy stance. the monetary policy stance will continue to be communicated via changes to the ocr and the mpc ’ s communication around the outlook for the economy and the policy rate. conclusion to conclude, i will reiterate the three key points i want you to take away from today. firstly, the reserve bank is resourced and ready to support the functioning of key new zealand dollar financial markets that are relevant to the transmission of monetary policy and for financial stability. secondly, we have adopted a principles - based approach to addressing domestic market dysfunction. application of these principles in the future should allow for markets to self - correct where possible, mitigate moral hazard risks, and protect the reserve bank balance sheet from undue risk. lastly, the settlement cash level will decline from current abundant levels to an ample level, possibly as early as the second half of next year. the reserve bank intends to adopt a hybrid approach to ensuring there is ample