RBNZ prudential policy suggests command and control

RBNZ's prudential plans inspire thoughts of glorious five-year plans. (Image: Getty)

Mon, 02 May 2022

The Reserve Bank of New Zealand is proposing to produce forecasts of its use of macroprudential tools in the same way that it produces economic and official cash rate (OCR) forecasts, according to deputy governor Christian Hawkesby.In a speech at a webinar event held by the central bank of Ireland last week, Hawkesby said macroprudential tools, such as loan-to-valuation ratio restrictions (LVRs) on bank lending, are now a permanent feature of the financial landscape.Comparing prudential policy to monetary policy, Hawkesby said: "We should...

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