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RBNZ: Stress tests show banks can withstand severe dairy downturn

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Mar 16, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    Reserve Bank of New Zealand said stress tests conducted in banks show these can withstand a severe dairy downturn.


    NZ agricultural sector highly leveraged, poses structural risk

    Stress test shows losses of between 3 to 8 percent of total dairy lending if payout remains low

    Banks could write off between 12 to 25 percent of initial dairy lending if payout remains low

    Bank losses likely absorbed through lower earnings than erosion of capital
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