Australian shares to open higher; Transurban pays 58¢ distribution; Deterra posts $60m royalties; RBA, Fed decisions this week; Blundy bids for Best & Less; Adore Beauty revenues fall.
New Zealand banks have relatively little interest rate risk, said the Reserve Bank of New Zealand, ahead of its Financial Stability report to be released on Wednesday.
“They manage this risk by matching the repricing profile of their assets and liabilities, and by using financial products to hedge any differences. They are also required to hold sufficient capital to cover potential losses arising from any remaining interest rate risk, which incentivises banks to carefully manage the risk,” the central bank wrote in a preview.
The RBNZ said it was an important point to make, as the failure of Silicon Valley Bank highlighted how quickly concerns over risk management can undermine depositor confidence in an entity and the banking system as a whole. “This can potentially lead to increased deposit outflows, and in extreme scenarios, can contribute to a bank run,” the RBNZ warned.
The central bank said after the 2008 global financial crisis it expanded prudential requirements to address capital and liquidity risk by requiring NZ banks to have robust frameworks for managing interest rate risk. They are also required to value their liquid assets at market price instead of book value.
New Zealand banks’ lending is generally at variable or short-term fixed interest rates, which means the potential losses for banks from interest rate movements are smaller, it noted. The country’s banks, it said, also hold fewer bond assets than those in other developed economies, and these bonds are accounted for at fair market value.
Australia Latest News, Australia Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Sensitive files about Royal Navy submarine reportedly found in pub toiletNavy investigating after report emerges that documents about the workings of HMS Anson were found in a Wetherspoons pub in Cumbria
Read more »
King Charles lends his royal support to Aussie charity at Buckingham PalaceKing Charles threw his support behind the Legacy Centenary Torch Relay, meeting with torch bearers and witnessing the torch lighting in the quadrangle of Buckingham Palace. 9News
Read more »
Meghan broke her promise to the QueenA royal insider has claimed Meghan Markle broke a promise to the late Queen Elizabeth II and that the former actress is secretly “very proud” to be associated with the royal family.
Read more »
Harry and Meghan to receive ‘a taste of their own medicine’A royal expert believes Harry and Meghan will receive a 'taste of their own medicine' when the Duchess of Sussex's estranged family reveal 'their truth' in an interview set to coincide with the coronation.
Read more »
Prince Harry's coronation itinerary revealedPrince Harry’s upcoming visit to the UK for his father’s coronation will be fleeting, with new reports confirming the royal’s itinerary.
Read more »
‘Brexit has been an utter disaster’: the royal heritage firm that can’t sell its wares abroadThe Derbyshire business has its playing cards for sale at Buckingham Palace, but getting them over the channel is now a ‘nightmare’
Read more »