RBNZ Financial Stability Report, May 2007

The Reserve Bank of New Zealand published its May 2007 Financial Stability Report on 9 May. RBNZ governor Alan Bollard said that New Zealand's financial system has continued to be stable.

Financial markets are performing well and the banks continue to be well capitalised and strongly profitable.

"However, there are significant economic imbalances which present risks for the financial system. The ongoing housing boom and large savings deficit in the household sector are being funded by

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