Live Updates > Live Update Details
2026-06-04 07:39:34
[Reserve of New Zealand and APRA jointly conduct stress tests on trans-Tasman banks] (1) The Reserve Bank of New Zealand has confirmed that it will jointly conduct stress tests on major banks in the trans-Tasman region with the Australian Prudential Regulation Authority (APRA), covering New Zealand's four major local banks (ANZ Bank New Zealand, Auckland Savings Bank, Bank of New Zealand, and Westpac Bank New Zealand) and their Australian parent banks. (2) The stress test scenarios include: a long-term conflict in the Middle East leading to the closure of the Strait of Hormuz and oil prices soaring to US$160 per barrel; a significant slowdown in the global economy, with a slow recovery only after three years; New Zealand experiencing a surge in inflation due to soaring energy and fertilizer costs, with the official cash rate peaking at 4%, GDP shrinking by 5.7%, and the unemployment rate rising to 10.5%; and large-scale credit rating downgrades and debt defaults by large corporations. (3) Each bank will calculate the impact of the above scenarios on its capital over the next five years, aiming to verify its risk resistance capabilities and improve the risk coordination mechanism between parent and subsidiary banks. The test results are expected to be released in November.
