d. Increasing the stringency of capital liquidity requirements
Many of the pros and cons have already been discussed in relation to this policy options. A brief summary however shall illuminate the viability of this policy solution. Increasing the stringency of capital liquidity requirements is a coercive measure. This is not ideal, for this standard may fight against some agents interests. The interests one would have in not complying with this measure would be perverse (as demonstrated earlier). This policy option follows an already established policy route. The instrument is already in place, as is the RBNZ. The cost of implementation is, therefore, small. It seems the effectiveness of the instrument has already been demonstrated. The leverage rates when such standards in place were low, at least according to official statistics we can see a strong correlation between this instrument and financial prudence. Certainly, this solutions has its weaknesses, these weaknesses can be overcome by amalgamating other policy options into a policy package. One need not see all the policy opportunities presented as opportunity costs to capital liquidity laws, rather many are inexpensive, or already largely in place. Setting up a voluntary collective for lending institutions could, therefore, help lending institutions be incorporated into the policy process by at least according them this apparent benefit. Furthermore, a marketing campaign and educational program ensures that consumer demand for prudential financial practices is created. This solidifies the notion that it is in the financial institutions best interests to comply.