Although the Government has tried to limit heavy overseas speculation since late last year, bankers said they expected additional steps, like audits of overseas borrowing by provincial governments.

A6 South Korea hired two Wall Street investment banks as advisers and said it would guarantee up to $20 billion in overseas borrowing by domestic banks.

From the 1850s to the 1880s, despite conflict with Maori, the Pakeha economy boomed on the back of wool exports, gold rushes and massive overseas borrowing for development.

But this time our overseas borrowing isn't financing an investment boom: adjusted for the size of the economy, business investment is actually low by historical standards.

In accordance with his economic theories, Muldoon introduced the so-called "Think Big" program, which saw massive overseas borrowing to finance large government construction projects.

A complete block on foreign investment might well have resulted in less investment overall; and the fact that so much was financed by overseas borrowing is of particular significance here.

It entailed the balancing of the budget through expenditure and wage cuts, without additional overseas borrowing, necessitating reductions in social welfare programs, defence spending and other sweeping cutbacks.

When the government runs a budget deficit, funds will need to come from public borrowing (the issue of government bonds), overseas borrowing, or monetizing the debt.

The government tried to avoid inflation via massive overseas borrowing and a variety of local regulations.

This contrasted considerably with the views held by National Party Prime Minister Robert Muldoon, who favoured an interventionist approach based on significant overseas borrowing.