NZ banks could cope with house prices halving, says Reserve Bank

Deputy governor Christian Hawkesby says banks could cope with stagflation. (Image: NZME)

Mon, 31 Oct 2022

New Zealand’s banks would still have more than the required minimum level of capital if house prices fell 47%, share prices dived 38%, unemployment climbed to 9.3% and the economy contracted by 5%.These conditions, plus an official cash rate (OCR) at 5.5%, two-year fixed-rate mortgages reaching 8.4%, and a one-in-25-year cyber risk event were part of the Reserve Bank’s latest stress test of banks.These data points were arrived at in the face of a global economic slowdown and the ongoing impact of the covid pandemic.Deputy governor C...

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