RTTN: New Zealand Central Bank Posts Profit In FY09 On Lower Interest, Exchange Rates
(RTTNews) - The Reserve Bank of New Zealand said it recorded a net profit of NZ$906 million in the financial year 2008-09, helped by lower interest and exchange rates. Moreover, the bank paid a dividend of NZ$630 million to the government.
The RBNZ governor Allan Bollard said in a statement that the strong financial result was due to abnormal maket condtions and warned that future financial performances could be more volatile than in recent years. The report said New Zealand escaped major damages from the crisis, but the experience highlighted imbalances and vulnerabilities.
"Prior to the crisis, households had been consuming beyond their incomes, borrowing heavily offshore through their banks," Bollard said. "However, further improvements will be needed to stop our international debt position from mounting further."
The central bank chief noted that the recent appreciation of the kiwi dollar did not support a shift towards export and import competing industries, which would be necssary to improve the situation. "On these trends, there is a real risk that recent improvements in the external balance will be reversed, " the governor added.
Bollard noted that in future international regulators would require better tools to regulate financial systems, including stronger liquidity and capital adequacy standards. The central bank has also introduced a new prudential liquidity policy for banks to address the main vulnerabilities of the system, and is well underway to introduce a prudential regime for non-deposit takers.
Meanwhile, the governor noted that given the seriousness of the financial crisis, the top personnel in the RBNZ would be denied increases on their remuneration for the calendar year 2009.
