Stress-test results reinforce need for capital review – RBNZ

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The results of the Reserve Bank of New Zealand’s latest stress test indicate that banks in New Zealand need to hold more capital.

In its latest bulletin, the central bank says banks would be able to survive even the most severe scenario, but they would come under serious strain. “This shows that there are limits to bank resilience,” the RBNZ says.

Under the less severe scenario, where unemployment hits 13.4% and house prices fall by 37%, banks run close to their minimum level of capital of 8%

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