New Zealand economists stress-test dairy sector
Article finds banking system losses would be ‘manageable’ under worst-case scenario
Banking system losses incurred as a result of rising non-performing loans (NPLs) in the dairy sector would be "manageable", according to the latest Reserve Bank of New Zealand (RBNZ) bulletin.
A group of economists from the RBNZ and DairyNZ, which represents the country's dairy farmers, have assessed financial stress in multiple scenarios featuring different assumptions about the future of milk prices and dairy farm values.
Their model assumes a loan becomes non-performing whenever a farm has a
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