New Zealand financial system bearing up: central bank
12/11/2008 16:59
The Reserve Bank of New Zealand said today that New Zealand's banking
system was bearing up well amid the global credit crisis and growing risk of a
prolonged global economic downturn.
Delivering its twice-yearly financial
stability report, the central bank said banks have sufficient reserves to deal
with the inevitable higher loan losses from continued gloomy economic
conditions.
The bank said local lenders have not suffered the write-downs
associated with their overseas counterparts and have high levels of reserves to
cope with any losses that may result from the economic downturn.
Reserve Bank
Governor Alan Bollard said the main Australian- owned banks, which make up 90
percent of the industry, are well placed to withstand the recession.
The
central bank has taken steps to ensure retail banks have access to capital
because of the global credit squeeze, including broadening the types of
securities it will accept as collateral for loans.
The government has also
brought in guarantee schemes for retail and wholesale lending to assure bank
customers and overseas lenders.
The Reserve Bank is also talking to the banks
about reducing their reliance on short-term wholesale funding, which leaves them
vulnerable to turbulence on credit markets.
However, the Reserve Bank expects
a slowdown in lending to homeowners and businesses as credit remains scarce, but
said that will help increase savings and reduce New Zealand's reliance on
overseas lenders.
Xinhua
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