Bollard advocates New Zealand's economic strength

Banks should avoid overreacting to the economic downturn as the New Zealand economy remains fundamentally sound and creditworthy, said Alan Bollard, the governor of the Reserve Bank.

"Banks, businesses and households alike need to recognise the new external environment and adopt a cautious approach - but don't go into hibernation, the underlying economy remains robust," said the governor.

It would be disappointing if investment in local businesses slowed because of credit constraints arising from

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