Reserve Bank Releases Financial Stability Report

November 11, 2015 New Zealand Finance

The New Zealand financial system is generally in god health, but faces threats from falling dairy prices and a surging property market.

On November 11th the Reserve Bank of New Zealand released its annual Financial Stability Report, detailing the national financial system and the risks it faces.

It was noted that the national financial system is generally in a positive state, however, it still faces some significant risks in the foreseeable future.

One of the major current risks is the debt accrued by the dairy industry, especially in the face of falling profits caused by a lull in international prices for dairy products.

Additionally, the current state of the housing market also poses significant risks, due to the rapid appreciation of housing in the country, especially in the Auckland region.

The rise in prices leaves lenders and borrows particularly exposed to negative effects which may arise following any downturn in housing prices.

Photo By: Simon Cunningham