The Conversation: “Why now would be a good time for the Reserve Bank to publish stress test results for individual banks”

In my latest post on The Conversation, I argue in favour of disclosure of stress test results of individual banks. The current hot housing market creates fertile ground for speculation about the financial stability of the New Zealand banking system. See the latest addendum to the RBNZ Financial Stability Report, which creates the impression that our bank supervisor wants to raise the alarm. But where is the data to support the alarmist tone?

To nip any unfounded speculations in the but, I call upon the RBNZ to quantify the risks that the housing market poses to financial stability. A stress test is the (obvious) tool of choice. Publishing the results of individual banks as soon as reasonably possible would contribute to financial stability for sure.

See the link here.