Academic journal article The Reserve Bank of New Zealand Bulletin

Reserve Bank Releases Financial Stability Report: 15 November 2006

Academic journal article The Reserve Bank of New Zealand Bulletin

Reserve Bank Releases Financial Stability Report: 15 November 2006

Article excerpt

The Reserve Bank today released its Financial Stability Report, a twice-yearly report that assesses the health of the New Zealand financial system. The report covers developments in financial institutions, foreign exchange and debt markets, and payments systems. It also comments on recent financial policy developments.

The Reserve Bank Governor, Dr Alan Bollard, commented: "Banks continue to appear well capitalised and continue to return strong profits. However, banks are competing in an aggressive manner, accepting lower margins and higher risk loans in their efforts to retain and grow market share in mortgage lending."

"With the household sector already saddled with considerable mortgage debt, any increased strain to service these debts, such as reduced incomes or higher interest rates, and unexpected decline in house prices, would impact negatively on the quality of banks' balance sheets.

"The Reserve Bank will be watching such developments closely, in particular as it implements new capital standards for banks that aim to ensure they have a sufficient buffer against unexpected losses," he said.

Dr Bollard said that "the Bank continues to expect the New Zealand economy will rebalance through a gradual slowdown in domestic spending and a reduction in the current account deficit. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.