7 May 2008
New Zealand's financial system has so far withstood a severe test of global financial markets, but it would be prudent to ensure there is adequate liquidity in case disruptions intensify, Reserve Bank Governor Alan Bollard said today, when releasing the Bank's May 2008 Financial Stability Report.
Dr Bollard said the system has come through a period when many overseas financial institutions, including some of the world's largest banks, have incurred substantial losses related to the US sub-prime mortgage market.
"The IMF has described recent events as the largest financial shock since the Great Depression. Adjustment could be protracted, and further volatility in world...