European Parliament Library

New Zealand Banks’ Vulnerabilities and Capital Adequacy, B. Jang, Masahiko Kataoka

Creator
Abstract
The paper finds that, given New Zealand’s conservative approach in implementing the Basel II framework, New Zealand banks’ headline capital ratios underestimate their capital strength. A comparison with Canadian, UK and Australian banks highlights the impact of New Zealand’s more conservative approach. Stress tests in the paper show that four large New Zealand banks could withstand sizable stand-alone shocks to their exposure to either residential mortgages (calibrated on the Irish crisis experience) or corporate lending. However, combined shocks to both residential mortgages and corporate lending would put more pressure on the banks’ capital. Given high bank concentration and large offshore wholesale funding needs, the merits of higher minimum capital requirements for systemically important domestic banks could be considered, together with other measures to be implemented
Table Of Contents
Cover; Contents; I. Introduction and Overview; II. Key Features of the New Zealand Banking Sector; Figures; 1. International Comparison of Key Soundness Financial Indicators; 2. Bank Market Share in New Zealand; 3. New Zealand's Four Largest Banks: Tier 1 Capital Ratio and Risk Weight; 4. New Zealand's Four Largest Banks: EAD and Tier 1 Capital; Tables; 1. New Zealand's Four Largest Banks: Selected Financial Soundness Indicators; 5. Banking Sector Assets for Selected Countries; 6. Assets of Four Major Banks for Selected Countries; 7. Bank Asset Composition; 8. Household Debt
Language
eng
Literary Form
non fiction
Note
"Asia and Pacific Department."
Physical Description
1 online resource (24 p.)
Specific Material Designation
remote
Form Of Item
online
Isbn
9781475548792

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