Why Does RBNZ Want Banks to Double Capital Buffers?

The video discusses New Zealand's economic conditions, focusing on the resilience of its banks, which are mostly Australian-owned. Despite no significant issues during the global financial crisis, the central bank aims to enhance bank resilience against rare but severe shocks. Historical context includes the 1990 bailout of the Bank of New Zealand. The video also explores the implications of these measures on both New Zealand and Australian banks, including potential impacts on profitability and borrowing costs.

What implications could the changes have on Australian banks operating in New Zealand?

How might the new measures affect bank profitability and borrowing costs?