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Climate Stress Test assesses resilience of major NZ banks
Director of Financial Stability Assessment & Strategy Kerry Watt says each year we run stress tests to assess banks’ resilience. The key stress-test for New Zealand’s five largest banks in 2023 featured a scenario called ‘Too Little Too Late' that tested their ability to withstand severe but plausible long-term climate-related challenges. “We deliberately designed the climate stress test scenario to be challenging. It included high physical and transition risks over a prolonged period of 28 years. Our aim was to assess the financial impact of the scenario on the banks’ balance sheets and uplift their ... (full story)