MSC NewsWire

Founded by Max Farndale 1947 - 2018
Friday, 22 February 2019 18:03
  • Home
    • About Us
    • Pricing
    • Global Presswire
    • Industry Organisations
  • News Sectors
    • Headlines Through Today
    • Environmental Talk
    • MSCMarketPlace
    • Out of The Beehive
    • Primary Sector Talk
    • Reporters Desk
    • The MSC NewsReel
    • MSCNetwork
    • FinTech Talk
    • The FactoryFloor Newsreel
    • Trade Talk
    • News Talk
    • Industry Talk
    • Technology Talk
    • Blockchain
    • Highlighted
    • The TravelDesk
      • TravelMedia
      • Sporting Tours
      • Holidays Tours Events + More
      • Airfares
      • Travel Enquiry Form
      • TravelBits
    • Travel Updates
    • The MSC TravelDesk Newsreel
    • Travel Talk
    • Travel Time
    • The Bottom Line
    • Regional News
    • News to Run Advice Form
    • World News
    • NewsDIRECT
    • MSCVoxPops
    • Press Releases
  • National Press Club
  • Contact Us

Higher bank capital better for banking system and NZ

Friday, 30 November 2018 14:37
  • font size decrease font size decrease font size increase font size increase font size
  • Print
  • Email

30 Nov: 1339  |  We can improve the soundness of the New Zealand banking system by requiring banks to hold more capital with no trade-off to efficiency, Reserve Bank Governor Adrian Orr says.

In a speech today to the Business New Zealand CEO Forum in Auckland, Reserve bank Governor Adrian Orr said that a banking system is sound only if it operates well in almost all circumstances and if the public is still confident in the system even when a bank fails.

“The most important tool in our kit is ensuring banks hold sufficient capital (equity) to be able to absorb unanticipated events. The level of capital reflects the bank owners’ commitment – or skin in the game - to ensure they can operate in all business conditions, bringing public confidence,” he said.

“The Reserve Bank needs to ensure there is sufficient capital in the banking “system” to match the public’s “risk tolerance”. This is because it is the New Zealand public – both current and future citizens - who would bear the brunt of a banking mess.”

Relatively higher levels of capital make a bank safer because it provides a buffer to cope with unexpected events and meet financial commitments. But capital comes at a cost to owners and long-term investors, who invariably want to reduce the risk to their own money while still generating good profits.

The Reserve Bank has been assessing the capital level in the banking sector that minimises the cost to society of a bank failure, while ensuring the banking system remains profitable, Mr Orr said.

“We have calibrated our ‘sweet spot’ thinking about economic ‘output’ and financial stability benefits. Our assessment is that we can improve the soundness of the New Zealand banking system with additional capital with no trade-off to efficiency.”

The Reserve Bank will be releasing a final consultation paper on bank capital requirements in mid-December, with an emphasis on the need to take a broad perspective for all New Zealanders and not just bank owners and investors.

  • Source: A RBNZ release
  • Record your news here: With MSCNewsWire’s SpeakPipe
Published in BUSINESS
Tagged under
  • Business
  • news talk

Related items

  • Sir Bill English to be honoured by Victoria University of Wellington
  • Plastics industry helps designers create easy-to-recycle packaging
  • Great Barrier unhappy with Auckland’s marine sludge plan
  • XE Update Friday 30 November, 2018
  • Australasian Plastics Manufacturer to Build Its First U.S. Plant
More in this category: « Australasian Plastics Manufacturer to Build Its First U.S. Plant
back to top

Subscribe To The MSCNewsWire eNews

Jul 16, 2018

Substantial review of local government funding welcome and needed

in REGIONAL
Oct 15, 2018

Rail union urges government to keep promise, save electric trains

in TRANSPORT
Apr 16, 2018

Bulletin article discusses New Zealand labour force participation developments

in FINANCIAL
Jul 20, 2018

NZ Refining granted resource consents to dredge Whangarei Harbour

in MINING
Jul 03, 2018

New Chair announced for Energy Management Association of NZ

in ENERGY
May 23, 2018

Chinese official and business leaders to discuss business opportunities in the Far North

in REGIONAL
Jul 09, 2018

Is Auckland headed for disaster?

in PORTS
Oct 08, 2018

New Zealand internet is going unlimited

in COMMUNICATION

Like MSCNewsWire on Facebook

MSC NewsWire is a gathering place for information on the productive sector in New Zealand focusing on Manufacturing, Productive Engineering and Process Manufacturing

  • Home
  • Global Presswire
  • Industry Organisations
  • National Press Club
  • Disclaimer
  • About Us
  • Pricing
  • Sitemap
Copyright © 2019 MSC NewsWire. All Rights Reserved.
Site Built & Hosted by iSystems Limited
Top
Home