The Reserve Bank today released the final Reserve Bank of New Zealand Bulletin for 2001.
The December 2001 issue of the Bulletin contains five articles and one speech. The articles in this edition deal with
foreign exchange markets and financial stability.
The first article, International capital flows, external debt, and New Zealand financial stability deals with New
Zealand's continuing reliance on foreign capital to fund significant proportions of New Zealand's investment and
consumption expenditure, and the potential vulnerability which this creates.
The second article titled Trends in foreign exchange trading draws on data contained in a recent international survey by
the Bank for International Settlements.
The next article continues the foreign exchange theme. Foreign exchange settlement risk survey discusses the settlement
risk associated with foreign exchange transactions where an international time lag occurs between payment and receipt
-this is known as "Herstatt risk".
The fourth article, The current state of New Zealand monetary union research, deals with currency union, an issue the
Reserve Bank has addressed in a number of previous Bulletin articles. The article summarises the economic literature
relating to currency unions and foreshadows some of the Bank's future research in this area.
The final article, Policy lessons on promoting financial stability, deals with a wide range of financial stability
issues, and summarises policy issues discussed at a recent APEC Policy Dialogue on Banking Supervision.