The banks are well managed and closely regulated by the Bank of PNG. In addition, the two subsidiaries of Australian banks have in place guarantees from their parent banks (letters of comfort) for any lending in excess of prudential exposure limits set by the Bank of PNG, giving confidence to the stability of the financial system.
We are gratified that market participants and private analysts viewed the exercise as credible. It helped restore confidence in the banking system and broader financial system, thereby contributing to the economy’s recovery.