RBNZ prepared to constrain asset bubbles

The Reserve Bank of New Zealand revealed on Friday 30 January that in rare circumstance it is prepared to adjust monetary policy to constrain extreme asset price bubbles, whereas normally the Reserve Bank is only required to ensure consumer price stability.

In a text prepared for the Canterbury Employers' Chamber of Commerce, Reserve Bank Governor Alan Bollard said using monetary policy to constrain asset price bubbles was risky, but in an extreme situation "the fallout from the build-up and b