A team from the International Monetary Fund (IMF) will this year to assess the stability of New Zealand's banking and insurance sectors and financial markets, Finance Minister Bill English said Monday.
The Financial Sector Assessment Program (FSAP) -- a routine part of the IMF's financial surveillance -- found the banking system was efficient and adequately supervised when it was last conducted in 2004, said English.
"New Zealand has a stable, well-capitalized banking sector that held up well in the face of the global financial crisis and I expect the IMF to comment favourably on both it and the improvements to the regulatory landscape since its last report," English said in a statement. "There are, however, a number of areas where the IMF may identify differences between New Zealand's arrangements and international standards," he said.
The reasons exist for the differences included the structure of the financial system and the regulatory and supervisory system the Reserve Bank of New Zealand (RBNZ) had developed to meet New Zealand conditions.
"We will be interested to hear what the IMF has to say about New Zealand's regulatory and supervisory framework and will carefully consider any recommendations it makes," said English.
The IMF team would make two visits to New Zealand, with a visit this month focusing on the banking and insurance sectors, and a second visit in November to review the securities regime. The final report was expected to be issued in April or May next year.
The Reserve Bank of New Zealand (RBNZ) has repeatedly raised concerns about the financial risks posed by the overheated housing market, particularly in the largest city of Auckland, which is home to a third of the population.
Announcing tighter loan-to-value restrictions on commercial mortgage lending last month, RBNZ governor Graeme Wheeler said "A sharp correction in house prices is a key risk to the financial system, and there are clear signs that this risk is increasing across the country."
Latest comments