APRA and RBNZ complete 2026 stress test

• The Australian Prudential Regulation Authority and the Reserve Bank of New Zealand completed their first joint bank stress test since 2017.
• Both banking systems demonstrated sufficient resilience to continue lending to households and businesses through a severe hypothetical economic downturn.
• The joint initiative aimed to strengthen cross-border regulatory collaboration and reduce administrative burdens for participating trans-Tasman financial institutions.

The Australian Prudential Regulation Authority and the Reserve Bank of New Zealand completed a joint 2026 trans-Tasman stress test assessing banking resilience across both economies.

The coordinated exercise marked the first joint stress test conducted by the two regulators in nine years to evaluate cross-border financial stability.

"The Australian and New Zealand financial systems are highly interlinked, with New Zealand’s four largest banks all subsidiaries of Australia’s major banks," said APRA Deputy Chair Therese McCarthy Hockey.

The simulated scenario tested bank capital against geopolitical tensions, oil price shocks, falling property values, elevated unemployment, market closures, and cyber-attack disruptions.

Both regulators stated that insights gathered from the stress test results will be used to guide future supervision, risk assessments, and crisis management frameworks.

The RBNZ published its detailed findings today, while APRA stated it plans to release its detailed findings later this year after direct engagement with participating banks.

The two regulatory bodies indicated they will consider running joint trans-Tasman stress testing exercises on a more regular basis going forward.