The Reserve Bank today released the June 2012 edition of the Reserve Bank Bulletin.
The Bulletin’s first article focuses on New Zealand’s monetary policy between 1998 and 2011. It concludes that the flexible inflation targeting approach served New Zealand relatively well through some very testing times.
The Bulletin’s second article looks at changes in the composition and pricing of bank funding.
It says a “step up” in banking funding costs, relative to the Bank’s Official Cash Rate, that occurred post-Global Financial Crisis, has now stabilised at higher levels. The Reserve Bank’s focus is on the interest rates firms and households face and so the OCR has been set lower than otherwise because of these increased funding margins.
The final article in the June Bulletin provides an update on the Bank’s roles and responsibilities under the Anti-Money Laundering and Countering Financing of Terrorism Act. It also provides more detail on the Bank’s proposed supervisory approach.