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2009 Job Summit World Recession & How We Cope Alan Bollard, Governor Reserve Bank of New Zealand 27 February 2009
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THE RESERVE BANK OF NEW ZEALAND The biggest destruction of global wealth ever? $3 trillionLost output $4 trillionHousing $30 trillionEquity Markets $2 trillionCredit-related losses Value loss (est. $US)
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THE RESERVE BANK OF NEW ZEALAND Trading partner growth slows Asian Crisis Tech Bubble Sars Financial Crisis
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THE RESERVE BANK OF NEW ZEALAND Trading partner growth slows Asian Crisis Tech Bubble Sars Financial Crisis
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THE RESERVE BANK OF NEW ZEALAND Lower growth world must adjust Consumption, currencies Reserves Savings, exports Currencies
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THE RESERVE BANK OF NEW ZEALAND New Zealand has strengths… Past strong growth, low unemployment Flexible product and labour markets Floating exchange rate & hedging Responsive monetary policy Strong government accounts Sound banking system
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THE RESERVE BANK OF NEW ZEALAND …but we don’t escape unscathed
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THE RESERVE BANK OF NEW ZEALAND …but we don’t escape unscathed New Zealand
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THE RESERVE BANK OF NEW ZEALAND Domestic credit growth Agriculture Business Household
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THE RESERVE BANK OF NEW ZEALAND Intended Investment & Employment Investment Employment
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THE RESERVE BANK OF NEW ZEALAND How we cope New Zealand has some strengths but also vulnerabilities We will play our role Banks must also play a key role You will all be affected. We want to hear your ideas….
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