Unlike many larger OECD countries, New Zealand did not suffer the severe recession that hit most of its peers. Many investors and others wondered why and this was largely due to the strict banking and lending standards that New Zealand has in place. This regulatory environment meant that the subprime loan market, which caused the recession, didn’t affect the country, since New Zealand had virtually no subprime market to begin with. When a country’s banks are not making risky loans, the effects from an economic slowdown are not nearly so severe as they inevitably must be in other countries that do have […]
