IMF Staff Country Reports

New Zealand: Financial Sector Assessment Program: Technical Note-Stress Testing the Banking Sector and Systemic Risk Analysis

May 10, 2017

Download PDF

Preview Citation

Format: Chicago

New Zealand: Financial Sector Assessment Program: Technical Note-Stress Testing the Banking Sector and Systemic Risk Analysis, (USA: International Monetary Fund, 2017) accessed November 21, 2024

Summary

This Technical Note discusses the results of stress testing of the banking sector and systemic risk analysis for New Zealand. The banking sector, which dominates the financial system, has significant exposure to real estate. A sharp decline in the real estate market, a prolonged period of low dairy prices, deterioration in global economic conditions, and a tightening in financial markets would adversely impact the system. Despite these risks, the banking system is resilient to severe shocks. Results of stress tests and sensitivity analysis indicate that the solvency and liquidity of the banking system can withstand adverse and severe shocks.

Subject: Banking, Commercial banks, Credit, Credit risk, Financial institutions, Financial regulation and supervision, Financial Sector Assessment Program, Financial sector policy and analysis, Loans, Money, Stress testing

Keywords: Asset buffer, Bank default, Bank liability, Banking system, Commercial banks, CR, Credit, Credit risk, Credit risk parameter, Defaulted bank, Disclosure statement, Funding cost, Funding pressure, Global, Interest rate, ISCR, Loans, LTV bucket, New Zealand bank, Securities portfolio, Stress test, Stress test result, Stress testing

Publication Details

  • Pages:

    79

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Country Report No. 2017/119

  • Stock No:

    1NZLEA2017007

  • ISBN:

    9781475599923

  • ISSN:

    1934-7685