Over the past year, even with the economic recovery underway, the financial system has faced further challenges from the series of earthquakes in the Canterbury region and from ongoing fragility in the global financial markets due to sovereign debt concerns. Unlike the case in many countries, New Zealand’s banking system has remained relatively resilient over this period.
Banks dominate the New Zealand financial system to an extent seen in few other economies, accounting for around 80 percent of the total assets of the financial system. Moreover, four banks – the Australian-owned subsidiaries and their branches domiciled in New Zealand – account for nearly 90 percent of the banking sector, or just over 70 percent of the financial system as a whole.