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Financial Stability Report

We publish our Financial Stability Report (FSR) every 6 months to assess and report on the soundness and efficiency of New Zealand’s financial system.

Purpose of the Financial Stability Report

In our Financial Stability Report (FSR) we assess and report on the soundness and efficiency of the New Zealand financial system. We identify risks to the financial system and provide in-depth coverage of topics currently relevant to financial stability. As part of our assessment, we look at macroprudential indicators. We also report on our regulatory initiatives to support financial stability.

Watch our May 2024 FSR highlights video or read our recent FSR reports below.

Audio: Kia ora I'm Chris from the Financial Stability Group here at Te Pūtea Matua.

These are 5 things you should know from our latest Financial Stability Report.

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Audio: The New Zealand financial system remains strong as it continues to adjust to the higher interest rate environment.

Banks are well placed to handle any economic downturns.

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Audio: Globally, inflation is generally declining, and most people expect interest rates in major economies will come down over the next year, so long as inflation continues to fall.

So far, the global financial system has been resilient to high interest rates, particularly because job losses have not been widespread.

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Audio: Most households with mortgages in New Zealand have now rolled on to higher interest rates.

Unfortunately, some people have fallen behind on their mortgage repayments, but that number is low compared to previous periods of stress, such as the Global Financial Crisis.

To make ends meet, households have had to pull back on their discretionary spending and reduce how quickly they repay their mortgage.

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Audio: House prices have been relatively stable over the past year, as high interest rates continue to limit what buyers can afford to borrow.

Looking ahead, our proposed debt-to-income restrictions will help prevent a rise in risky mortgage lending, particularly during periods of low interest rates.

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Audio: It now costs more to insure your home or property than ever.

For owners of properties in high risk areas, insurance may become increasingly unaffordable and in some cases it may be withdrawn altogether.

We recently ran a climate change stress test with major banks that highlighted how important it is for banks to manage their exposure to climate related risks, including from declining insurance coverage.

Find out more about our latest Financial Stability Report on our website.

Recent Financial Stability Reports

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