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Financial risks have stabilised as rapid house price growth slows

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15.11.2017

The risks facing New Zealand's financial system have stabilised as house price inflation and credit growth slow due to tighter macroprudential tools implemented by the Reserve Bank and higher lending rates, Standard & Poor's says.

S&P Global Ratings classifies the New Zealand bank sector as AA/Stable/A-1+ in group '4' under its banking industry country risk assessment, alongside nations such as Estonia, Israel, Kuwait, Malaysia, Mexico, Saudi Arabia and Taiwan, it said in its latest banking industry country risk assessment for New Zealand.

"We expect New Zealand's economic growth to be solid over the medium term," S&P said, adding that growth in fiscal 2017 was 2.7 percent and is expected to remain in this range over the next few years. "We consider that the risks facing New Zealand's financial system have stabilised, reflecting the slowdown of a rapid rate of increase in residential house prices and private sector credit extension and the........

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