From Interest.co.nz
Article....
International ratings agency, Fitch Ratings, has released a report saying New Zealand topped a list of countries most exposed to de-leveraging during the global financial crisis. However, Fitch also said that New Zealand was well placed to benefit from a global economic recovery because there was little indication that financial sector distress would intensify.
New Zealand’s place at the top of the de-leveraging exposure list was largely due to its heavy corporate debt burden, the report said. Fitch said New Zealand’s net external debt was also an issue.
“Net external debt is included as an additional indicator of de-leveraging risk, as it captures the extent to which residents (private and public sector) are indebted, in net terms, to the rest of the world. Spain, Australia and New Zealand look most exposed on this basis, closely followed by the US, UK and Denmark,” the report said.
The report outlined New Zealand’s vulnerability to the housing and property sector, labelling its exposure to the sector as ‘high’.
“This analysis highlighted economies most vulnerable to falling house prices and to balance sheet pressures weighing on consumer spending, but the results are also likely to be a fair approximation of the potential for asset quality deterioration in mortgage loans. The rankings…also incorporate actual house price movements since mid 2007 and the latest data on relative household debt levels. New Zealand, Denmark, the UK, the US, Ireland, Australia and Sweden exhibit the highest vulnerability,” the report said.
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Cheers
Marc
The report outlined New Zealand’s vulnerability to the housing and property sector, labelling its exposure to the sector as ‘high’.
International ratings agency, Fitch Ratings, has released a report saying New Zealand topped a list of countries most exposed to de-leveraging during the global financial crisis. However, Fitch also said that New Zealand was well placed to benefit from a global economic recovery because there was little indication that financial sector distress would intensify.
New Zealand’s place at the top of the de-leveraging exposure list was largely due to its heavy corporate debt burden, the report said. Fitch said New Zealand’s net external debt was also an issue.
“Net external debt is included as an additional indicator of de-leveraging risk, as it captures the extent to which residents (private and public sector) are indebted, in net terms, to the rest of the world. Spain, Australia and New Zealand look most exposed on this basis, closely followed by the US, UK and Denmark,” the report said.
The report outlined New Zealand’s vulnerability to the housing and property sector, labelling its exposure to the sector as ‘high’.
“This analysis highlighted economies most vulnerable to falling house prices and to balance sheet pressures weighing on consumer spending, but the results are also likely to be a fair approximation of the potential for asset quality deterioration in mortgage loans. The rankings…also incorporate actual house price movements since mid 2007 and the latest data on relative household debt levels. New Zealand, Denmark, the UK, the US, Ireland, Australia and Sweden exhibit the highest vulnerability,” the report said.
Read more...
Cheers
Marc