Banks remain stable against Brexit uncertainty

29 June 2016

Banks remain stable against Brexit uncertainty

New Zealand’s stable and robust banking system stands strong against the uncertain implications of Brexit, says the New Zealand Bankers’ Association (NZBA).

“New Zealand’s banks are strong, well-funded and well regulated, and this stability positions them well in an environment of global uncertainty,” said New Zealand Bankers’ Association chief executive Karen Scott-Howman.

“Since the Global Financial Crisis there has been a renewed focus on ensuring risk is minimised and mitigated against within the banking industry. There have been numerous legislative and regulatory changes since the GFC, which resulted in substantial investment and resources by banks, including Reserve Bank of New Zealand’s requirement for banks to hold increased capital to help protect against volatility in international markets.”

New Zealand banks hold strong capital and liquidity buffers in excess of their regulatory requirements. Recent independent Reserve Bank of New Zealand stress tests suggest that “banks have sufficient capital to withstand a severe economic downturn” should it ever occur.

“New Zealand can have confidence in our banking system. Our banks were resilient in the GFC, and we remain well positioned to withstand any turbulence in the global economy,” Scott-Howman added.

ENDS

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