As per Geoff Bascand, Deputy Governor and General Manager of Financial Stability, The Reserve Bank of New Zealand, COVID-19 has posed noteworthy challenges to economy as well as the financial system as a whole. Furthermore, it is believed that it would take some time before full recovery is witnessed.
Initial responses of the Banks to the COVID-induced lockdown was robust. Banks stood up and supported their customers with liquidity facilities, mortgage deferrals, and covenant relief. However, success in the economic recovery of the kiwi nation requires;
- Lending to productive, job-rich sectors of the economy;
- Banks to drawdown far-sighted on their buffers to aid their customers;
- Patience of shareholders for longer-term payoffs;
- Confronting of long-term low-interest rates by the banking sector;
- Increasing internal investment, clarity of business models and customer focus; and
- Strong risk management, organisational leadership and governance.