The challenge with financial stability is how to maintain a strong, resilient and efficient financial system in the face of changing and emerging risks said Deputy Governor and Head of Financial Stability Geoff Bascand in Sydney today.

"Ten years on from the pain and enormous costs of the Global Financial Crisis (GFC), it’s clear that prevention is better than cure. Reducing the risk of a crisis in New Zealand demands that we understand the domestic and global risks relevant to us. For example, snake bites are unpleasant but not pertinent to most New Zealanders. The challenge is assessing what is too risky, too safe, and just right?” Mr Bascand said.

New Zealand’s financial sector is sound and well regulated. It weathered the GFC better than most, but there was no room for complacency, Mr Bascand said.

New Zealand has two main vulnerabilities: our high levels of indebtedness (in the household and dairy sectors) and our reliance on foreign sources of funding.