RBNZ says bank system sound, but over-valued housing and high household and dairy debt remain risks; China slump also a risk.
Governor Graeme Wheeler said a disruption in China's economic growth was one source of risk for New Zealand farm incomes and international wholesale bank funding markets.
"Such a disruption could also affect international capital markets, and impair funding conditions for New Zealand banks," Wheeler said in the statement.
“More broadly, New Zealand remains exposed to the international financial markets as a result of its high external debt and ongoing current account deficit. However, strong deposit growth in recent years has helped to reduce the reliance of the banking system on offshore funding," he said. |