New Zealand Bank Vulnerabilities in International Perspective

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Author/Editor:

Brooks, Ray | Cubero, Rodrigo

Authorized for Distribution:

October 1, 2009

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate.

Summary: 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.

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Series:

Working Paper No. 09/224

Subject(s):

Author's keyword(s):

New Zealand | bank funding | bank asset quality | stress tests

English

Published:	October 1, 2009
		Format:	Paper
Stock No:	WPIEA2009224	Pages:	26
Price:	US$18.00 (Academic Rate: US$18.00 )


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