RBNZ risk management to protect the system, not individual entities

Thu, 23 Oct 2014

By Paul McBeth Oct. 23 (BusinessDesk) - The Reserve Bank's risk management processes aim to protect the integrity of the entire financial system rather than individual entities, which should be allowed to fail to avoid moral hazard and inefficiency, the regulator says. The central bank is tasked with managing system-wide risk, and largely aims to deal with market failures where the cost of risks aren't borne by the institutions taking them, and where information in the market isn't asymmetrical, head of prudential supervision Toby Fiennes...

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