Featured Product

    RBNZ Releases Results of the 2017 Stress Test of Major Banks

    July 09, 2018

    RBNZ published the results of the 2017 stress tests of major banks. The detailed results from the 2017 stress test exercise involve the four largest banks in New Zealand: ANZ Bank New Zealand, ASB Bank, Bank of New Zealand, and Westpac New Zealand. RBNZ also published its approach for using the stress tests to monitor the stability of the financial system.

    Outcomes from the test suggest that the four banks would be able to maintain capital levels above their minimum requirements during these scenarios. Repricing actions to maintain relatively stable net interest income and low operating expenses mean that these banks would be able to offset large losses on their credit portfolios and from the misconduct event with their underlying earnings. There are, however, uncertainties around the magnitude of losses banks may face in a real downturn scenario and the extent to which banks would be able to restore their interest margins. As a result, the outcomes remain sensitive to the modeling assumptions used in the test. The stress tests modeled a severe macroeconomic downturn scenario and an operational risk event related to mortgage lending misconduct.

    In feedback on their performance in the 2017 test, RBNZ encouraged further improvements in banks’ ability to assess how stress test results vary depending on modeling assumptions, and emphasized the importance of providing sufficient context around these sensitivities when discussing stress test outcomes with senior management and directors. Stress test results are also an input to the calibration of capital requirements, which are currently under review. RBNZ expects banks to be well-capitalized, so they can continue providing credit to the economy even under severe stress scenarios.

     

    Related Links

    Keywords: Asia Pacific, New Zealand, Banking, Stress Testing, Banking Supervision, 2017 Stress Test, RBNZ

    Featured Experts
    Related Articles
    News

    MAS Concludes Blockchain Payments Prototype Shows Commercial Potential

    MAS and Temasek jointly released a report to mark the successful conclusion of the fifth and final phase of Project Ubin, which focused on building a blockchain-based multi-currency payments network prototype.

    July 13, 2020 WebPage Regulatory News
    News

    PRA Publishes Public Working Draft of XBRL Taxonomy 1.2.0 for Insurers

    PRA published a public working draft, or PWD, of version 1.2.0 of the BoE Insurance XBRL taxonomy, along with the related technical artefacts.

    July 13, 2020 WebPage Regulatory News
    News

    CPMI Report Sets Out Building Blocks to Enhance Cross-Border Payments

    CPMI published a report that sets out nineteen building blocks for a global roadmap to improve cross-border payments.

    July 13, 2020 WebPage Regulatory News
    News

    EBA Publishes Phase 2 of Technical Package on Reporting Framework 2.10

    EBA published phase 2 of the technical package on the reporting framework 2.10, providing the technical tools and specifications for implementation of EBA reporting requirements.

    July 10, 2020 WebPage Regulatory News
    News

    APRA Updates Reporting Validation Rules in July 2020

    APRA updated the lists of the Direct to APRA (D2A) validation rules for authorized deposit-taking institutions, insurers, and superannuation entities.

    July 10, 2020 WebPage Regulatory News
    News

    PRA to Partly Apply EBA Guidelines on Disclosures for COVID Measures

    PRA updated the statement that provides guidance to regulated firms on implementation of the EBA guidelines on reporting and disclosure of exposures subject to measures applied in response to the COVID-19 crisis.

    July 10, 2020 WebPage Regulatory News
    News

    EBA Updates List of Correlated Currencies Under CRR

    EBA updated the 2019 list of closely correlated currencies that was originally published in December 2013.

    July 10, 2020 WebPage Regulatory News
    News

    ESMA Guides on Securitization Repository Data Consistency Thresholds

    ESMA published the final report on the guidelines on securitization repository data completeness and consistency thresholds.

    July 10, 2020 WebPage Regulatory News
    News

    FASB Proposes to Delay Implementation of Insurance Contracts Standard

    FASB issued a proposed Accounting Standards Update that would grant insurance companies, adversely affected by the COVID-19 pandemic, an additional year to implement the Accounting Standards Update No. 2018-12 on targeted improvements to accounting for long-duration insurance contracts, or LDTI (Topic 944).

    July 09, 2020 WebPage Regulatory News
    News

    APRA Updates Regulatory Approach to Loan Deferrals Amid COVID Crisis

    APRA updated the regulatory approach for loans subject to repayment deferrals amid the COVID-19 crisis.

    July 09, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 5480