Economics at your fingertips  

Summary of the dairy portfolio stress testing exercise

Ashley Dunstan
Additional contact information
Ashley Dunstan: Reserve Bank of New Zealand,

Reserve Bank of New Zealand Bulletin, 2016, vol. 79, 1-10

Abstract: In late 2015, the five largest dairy lenders participated in a stress test featuring sustained low milk prices and sharp falls in dairy land values. This article summarises key insights from the test. Banks report expansion in dairy lending, at least in the near term, as they support existing borrowers facing negative cash flow. Consistent with earlier work, the scenarios generate significant increases in loss rates that are manageable for the banking system as a whole. There is a risk that the time taken to resolve stressed dairy exposures could be longer than reported in the tests, creating an ongoing source of uncertainty for banks.

Date: 2016
References: Add references at CitEc
Citations View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link) ... 2016/2016mar79-5.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:

Access Statistics for this article

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

Page updated 2017-09-29
Handle: RePEc:nzb:nzbbul:mar2016:05