Joint stress test shows Australian, New Zealand banks resilient, regulators say

By Reuters News

WELLINGTON, Oct 15 (Reuters) - Australian and New Zealand banks would stay resilient and keep lending through a deep recession in both countries caused by geopolitical tensions and an oil price spike, regulators said on Thursday after their first joint stress test since 2017.

  • The authorities said in a joint statement the results indicate the banking systems would remain resilient through a severe downturn in both economies. "Notwithstanding substantial loss levels and pressure on capital and liquidity, banks continued to support households and businesses by providing credit throughout the stress period," they added.

  • Australian Prudential Regulation Authority Deputy Chair Therese McCarthy Hockey said close cooperation between trans-Tasman regulators was an important element of maintaining financial stability as the countries' financial systems are highly interlinked. "That interconnection means a banking crisis in one country could well cause serious impacts on the other side of the Tasman," she said.

  • The test covered ANZ NZ, ASB, BNZ and Westpac, which make up 84% of lending in New Zealand, plus their Australian parent banks ANZ ANZ.AX, Westpac Banking Corp WBC.AX, National Australia Bank NAB.AX and Commonwealth Bank of Australia CBA.AX.

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