ASB senior economist Jane Turner said recent events in Australia made the Reserve Bank's FSR important.
Rating agency Standard & Poor's downgraded 23 Australian financial institutions - but not major banks - citing house price growth and household leverage as the chief concerns.
S&P noted: ``continued build-up of economic imbalances ... due to a rapid rise in private sector debt and house prices, particularly Sydney and Melbourne, had exposed Australian financial institutions to greater risk''.
``A similar situation is, at this stage, some way off for New Zealand. Even so, that has not stopped some notable financial institutions preceding [sic] a demise for New Zealand's housing sector.''
That included Goldman Sachs, which predicted a 40% chance of the market going ``bust'' in the next two years, Ms Turner said.
There were a few issues with the New Zealand analysis and it should also be noted Goldman Sachs defined a bust as a 5% decline in real house prices, or 2.8% in nominal terms at the current rate of inflation.
That felt like it was redefining the English language, she said.
``We do not expect any new housing measures to be announced at this week's FSR. The market is showing signs of cooling, removing the need for further action to be taken by the Reserve Bank at the moment.''
The central bank was also working on debt-to-income restrictions and finance Minister Steven Joyce had requested a cost-benefit analysis and public consultation to be carried out, Ms Turner said.
That effectively delayed a decision on the inclusion of debt-to-income restrictions in the memorandum of understanding until after September's election. Public consultation was imminent and could be formally announced tomorrow, or soon after.
The FSR would give the Reserve Bank an opportunity to provide an update on other key financial stability vulnerabilities, which included dairy sector indebtedness and increased demand for offshore bank funding. ASB did not expect to see the central bank flag any new major risks in those areas compared to last time.
``We also do not expect the FSR to provide any motivation for adjustments to forecasts on the timing of the official cash rate's next move.''
Budget 2017 did not adjust the ASB, or the market's, expectations on the timing in the next move in interest rates, Ms Turner said.
Overall, the Budget had little impact on financial markets, partly due to much of the information having been made public in the weeks leading up to the announcement.
