New Zealand Bank Vulnerabilities in International Perspective

Rodrigo Cubero and R. Brooks

No 2009/224, 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: WP; bank; financing; mortgage; New Zealand dollar; New Zealand; bank funding; bank asset quality; stress tests; bank capital; asset quality; disclosure statement; New Zealand bank; bank assets; Mortgages; Capital adequacy requirements; Housing prices; Loans; Stress testing; Global (search for similar items in EconPapers)
Pages: 26
Date: 2009-10-01
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Citations: View citations in EconPapers (2)

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