PHOTO: ROBERT KITCHIN/STUFF Reserve Bank governor Adrian Orr has highlighted the level of household and farm debt held in New Zealand.
New Zealanders are carrying significant amounts of debt, and that could become a problem if a serious downturn hit, the Reserve Bank says.
It has released its latest Financial Stability Report, which shows New Zealand’s financial system is broadly resilient.
But risks remain, particularly around household and dairy farm debt, and the potential for high asset prices and debt levels in many large countries, particularly China, to create global instability.
The report said banks would face large losses if households and dairy farms defaulted on their loans at the same time as house prices and farm prices fell.
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