Aside from the potential financial stability or soundness concerns this raises, it may also have implications for product and service innovation, and ultimately the dynamism of our financial system. We asked at the beginning of this paper how well our financial services industry works for us. To conclude: banks deliver basic banking services in New Zealand reasonably efficiently.
However our capital markets do not all look so sophisticated: there are some financial services that our businesses and our investors cannot easily access on-shore. Our financial system currently looks sound. The industry has adapted to our rather unique circumstances. Because of this, and in particular our lack of household savings, we probably remain more vulnerable to financial shocks than most developed countries.