New Zealand Bank Vulnerabilities in International Perspective

Ray Brooks and Rodrigo Cubero

No 09/224, IMF Working Papers from International Monetary Fund

Abstract: The global financial crisis is creating stress on banking systems across the world through funding and asset quality shocks. This paper combines different stress scenarios, as well as cross-country analysis, to assess New Zealand bank vulnerabilities to the global crisis and the domestic recession. It finds that a sharp worsening of asset quality would be required to reduce bank capital below the regulatory minimum. On the funding side, a disruption to banks' offshore funding may put pressure on the exchange rate, but would not trigger a systemic liquidity problem.

Keywords: Banking sector; Banks; Corporate sector; Credit risk; Cross country analysis; Financial assets; Financial crisis; Financial soundness indicators; Household credit; Housing prices; New Zealand; Private sector; Risk management (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ban and nep-rmg
Date: 2009-10-14
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