The Reserve Bank says the risks to New Zealand's financial system have increased in the past six months.
Its latest Financial Stability Report has identified slowing global growth, low dairy prices and rising house prices as risks.
There had been speculation the RBNZ might today propose new restrictions on lending to the property market. But for now it is not making any changes to the current lending rules.
Bank Governor Graeme Wheeler says the outlook for the global economy has "deteriorated" in recent months. Lower interest rates and low oil prices have not been enough to prevent a slowdown in the economies of a number of New Zealand's trading partners.
Mr Wheeler says: "Dairy prices remain low with global dairy supply continuing to increase. Many farmers now face a third season of negative cash flow with heavy demand for working capital.
"Imbalances in the housing market are increasing with house price inflation lifting again in Auckland, after cooling in late 2015 and early 2016 following new restrictions in investor loan-to-value ratios and Government measures introduced in October.
The RBNZ is worried that house prices are now starting to increase "strongly" in a number of regions across the country. However, "house prices outside Auckland are generally much lower relative to incomes".
The Bank says it "remains concerned that a future sharp slowdown could challenge financial stability given the large exposure of the banking system to the Auckland housing market".
So it says further efforts to reduce the imbalance between housing demand and supply in Auckland remain essential.
"This includes measures such as decreasing impediments to densification and greenfield development and addressing infrastructure and other constraints to increased housing supply."
Prior to the release of the report, economists had described the Reserve Bank as being stuck between a rock and a hard place.
Inflation is sitting at 0.4 percent. That is well below the Bank's target range of two percent. So the RBNZ is looking at more cuts to the Official Cash Rate. That might also lower the dollar and give farmers and other exporters a helping hand.
But any cut to interest rates could fuel the already hot Auckland property market.
Potential options would be to lift the existing thirty percent deposit requirement for investors in the Auckland property market. Or the RBNZ could extend the restrictions for property investors across New Zealand.
Another idea is that the Reserve Bank could link the ability to borrow to people's income.
In today's report the RBNZ says: "Banking system capital and liquidity buffers are strong and profitability is high."
But it has warned that the system faces challenges.
"Internationally, credit spreads have widened, placing upward pressure on the cost of funds for New Zealand banks.
"The level of problem loans in the dairy sector is expected to increase significantly over the coming year, although we expect that dairy losses will be absorbed mainly through reduced earnings."
The RBNZ says the loan to value (LVR) restrictions have "substantially reduced the proportion of risky housing loans on bank balance sheets".
"This is providing an ongoing improvement to financial system resilience."
The Reserve Bank says it is closely monitoring developments to assess whether further financial policy measures would be appropriate.