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Market Overview
New Zealand - Effort Needed to Achieve Resilient Financial System
An ongoing effort is
needed to strengthen the New Zealand financial system, stated the Governor of
the Reserve Bank of New Zealand, Adrian Orr, during a speech, while releasing
the May financial stability report.
As the financial system
risks remain high, the governor suggested that increasing financial institutions’ capital positions are central to ensuring that they can withstand severe shocks. In order to put this
plan in action, Orr said “we have proposed higher capital requirements for banks
and are currently reviewing public submissions on this proposal.”
The reserve
bank will also take measures to ensure that banks and insurers take note of
issues identified in the review when it comes to their conduct and culture.
This is important because the way they treat customers influences the
continuing relationship between service providers and clients. So, a focus on
long-term customer care is needed.
A long-term
focus by financial firms, according to Orr, is also needed when it comes to
adapting to changing competitiveness, regulatory and natural environment
issues.
Rounding off
this matter, Orr said “risks associated with climate change are also impacting
on the accessibility of insurance, with potential flow-on effects on bank
lending. These risks must be appropriately identified and priced, so as to best
ensure a stable transition over coming years.”
View the full
Financial Stability Report for May 2019 here: http://bit.ly/2VZf0z8.
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