EconPapers    
Economics at your fingertips  
 

Outcomes from the 2017 stress test of major banks

Charles Lilly
Additional contact information
Charles Lilly: Reserve Bank of New Zealand, http://www.rbnz.govt.nz

Reserve Bank of New Zealand Bulletin, 2018, vol. 81, No 9, 18 pages

Abstract: The Reserve Bank uses stress tests to assess the soundness of the financial system. This article summarises results from a recent exercise involving the four largest New Zealand banks. The test modelled a severe macroeconomic downturn scenario and an operational risk event related to mortgage lending misconduct. Consistent with previous tests, results suggest that strong underlying profitability from repricing actions to maintain their net interest margins would allow these banks as a group to absorb significant losses through the stress scenario without breaching their minimum capital requirements. While the test demonstrates these banks’ resilience, there remains uncertainty as to how such scenarios would unfold in reality.

Date: 2018
References: View complete reference list from CitEc
Citations Track citations by RSS feed

Downloads: (external link)
https://www.rbnz.govt.nz/-/media/ReserveBank/Files ... 018/2018jul81-09.pdf
https://www.rbnz.govt.nz/-/media/ReserveBank/Files ... 18jul81-09-data.xlsx
https://www.rbnz.govt.nz/-/media/ReserveBank/Files ... 018/2018jul81-08.pdf

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nzb:nzbbul:jul2018:9

Access Statistics for this article

More articles in Reserve Bank of New Zealand Bulletin from Reserve Bank of New Zealand Contact information at EDIRC.
Bibliographic data for series maintained by Reserve Bank of New Zealand Knowledge Centre ().

 
Page updated 2018-07-28
Handle: RePEc:nzb:nzbbul:jul2018:9