13 May 2024

Banks need focus on climate risks: RBNZ

From Nine To Noon, 9:30 am on 13 May 2024
A photo taken on 22 February 2023 shows Karekare homes destroyed by a slip during Cyclone Gabrielle.

Photo: Leonard Powell

The Reserve bank wants retail banks to pay more attention to climate risks and the ongoing insurability of the properties against which they lend.

The cost of insuring homes and properties has risen dramatically over the past decade, due to higher construction costs and higher reinsurance costs as reinsurers adjust their views of New Zealand risks. In its latest Financial Stability Report released last week, the Reserve Bank says banks also need to improve their understanding of natural hazards, which will feed into lending decisions.

Kathryn speaks with Reserve Bank Director of Financial Stability Assessment & Strategy Kerry Watt.