JENNY RUTH: RBNZ's awkward about-face on bank capital and stress tests

Wed, 27 May 2020

After spending a year trying to convince New Zealand that banks needed significantly higher capital to withstand a one-in-200-year financial shock, the Reserve Bank is now in the awkward position of explaining why the banks are already able to weather the largest decline in annual GDP in at least 160 years. "Even accounting for an expected recovery in the second half of the year, this year's projected decline in annual GDP is the largest in at least 160 years," the RBNZ said in its latest financial stability report. But the central bank s...

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