LIQUIDITY ANALYSIS. NEW ZEALAND & GLOBAL LIQUIDITY
. Alan Bollard. "Easy money — global liquidity and its impact on New Zealand", speech to the Wellington Chamber of Commerce.

The BIS publishes an interesting paper by Alan Bollard, Governor of the Reserve Bank of New Zealand. According to Bollard, global liquidity has "increased dramatically over recent years", reflecting three key factors: (1) a surplus of saving relative to investment in the East-Asian and oil exporting countries; (2) financial innovation and the arrival of "new players"; (3) the carry trade.

Bollard notes that the sheer magnitude of "the flow of increased global liquidity", by paving the way to further financial innovation, has led to ... even more liquidity!