New Zealand banks still prone to offshore wholesale funding risks

Two of the main credit rating agencies have maintained New Zealand issuers' default ratings and market outlook as stable or positive, but cautioned that the dependence of the country's banks on wholesale offshore funding is a significant source of risk.

Fitch Ratings affirmed the local and foreign currency long-term and short-term issuer default ratings of the Bank of New Zealand (BNZ), ASB Bank, Westpac New Zealand and ANZ National Bank as "stable and positive". It says the ratings follow the

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Credit risk & modelling – Special report 2021

This Risk special report provides an insight on the challenges facing banks in measuring and mitigating credit risk in the current environment, and the strategies they are deploying to adapt to a more stringent regulatory approach.

The wild world of credit models

The Covid-19 pandemic has induced a kind of schizophrenia in loan-loss models. When the pandemic hit, banks overprovisioned for credit losses on the assumption that the economy would head south. But when government stimulus packages put wads of cash in…

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