Financial stability drives long-term growth
In his speech at the FSC24 Conference, Reserve Bank Deputy Governor Christian Hawkesby (pictured above) stressed the critical role of financial system resilience as a driver of New Zealand’s long-term prosperity.
“Resilience of the financial system is a pathway to enabling a productive and sustainable economy, and ultimately the prosperity of all New Zealanders,” Hawkesby said.
Balancing resilience with innovation and inclusion
Hawkesby noted that while resilience is essential, it must work in tandem with other important elements such as competition, innovation, efficiency, and inclusion.
He said that the Reserve Bank, which recently opened consultations on the next set of standards under the Deposit Takers Act 2023 (DTA) and an Issues Paper on the crisis management framework, considers these factors carefully when making financial policy decisions.
“Our principal contribution to achieving prosperity is through the provision of a resilient system, but we must also foster an environment where competition and innovation can thrive,” Hawkesby said.
The financial stability frontier, a conceptual framework introduced during the speech, highlighted how policies must balance resilience with these additional factors.
Hawkesby illustrated this balance by discussing recent examples, such as the Capital Review and the Māori Access to Capital initiative, where financial policies were designed to enhance both resilience and innovation.
A collective effort toward prosperity
Hawkesby concluded by emphasising that the path to a prosperous New Zealand requires collective effort.
“For all New Zealanders to thrive, we must work together,” he said, calling for continued collaboration between the public, private, and regulatory sectors.
He highlighted the Reserve Bank’s Strategic Themes 2030, which include promoting trust, improving resilience, and enhancing efficiency and competition.
Reflecting on the broader economic landscape, Hawkesby reinforced the notion that resilience is not just a reactive measure but a proactive one, ensuring the financial system can support future growth and withstand potential challenges.
Read Hawkesby’s speech in full here.
Get the hottest and freshest mortgage news delivered right into your inbox. Subscribe now to our FREE daily newsletter.
