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Stress test reinforces importance of bank capital
The Reserve Bank’s – Te Pūtea Matua – latest stress test of New Zealand’s banks illustrates the benefit and necessity of shoring up bank capital in the good times to provide resilience. The COVID-19 pandemic has demonstrated that large shocks can occur with very little warning. “The onset of the COVID-19 pandemic provides a stark reminder to us all of the importance of being prepared for the unexpected, especially when you are a systemically important bank at the core of New Zealand’s financial system. The more capital a bank holds, the better it can weather economic storms and meet customer needs ... (full story)