This information is designed to provide a broad overview of the structure of the New Zealand financial system1 and background information for the Financial Stability Report (FSR)
The Reserve Bank regulates banks, insurers, and non-bank deposit takers (NBDT)2, for the purpose of promoting the maintenance of a sound and efficient financial system. The Bank’s approach to prudential supervision is described in our Statements of supervisory and enforcement approaches. The Bank has no responsibility for non-deposit taking non-bank lending institutions (NBLI) or unlicensed insurers. The Reserve Bank also oversees and operates New Zealand’s financial market infrastructures.
The New Zealand financial system is dominated by the banking sector, with banking assets accounting for a very large share of overall financial system assets (figure 1). In contrast, capital markets are relatively less developed in New Zealand, with total market capitalisation of equities at the New Zealand Stock Exchange around $154 billion, while the domestic bond market is around $129 billion (excluding government debt). The managed fund industry is also small compared to banks, with around $153 billion of assets under management.
Note: Numbers may not sum due to rounding.
Source: RBNZ Bank Balance Sheet (BBS), RBNZ Standard Statistical Return (SSR), RBNZ Non-Bank Deposit Taker Prudential Return (NBDTPR), Individual Insurer Financial Statements.4
1 This note is intended to provide a high level overview of the structure of the New Zealand financial system, with a key focus on the banking sector. It does not include an extensive discussion of New Zealand financial markets.
3 Total assets are not yet available on a consistent basis for the insurance sector. The value is derived from individual insurer financial statements up to June 2019. Asset values may be accounted for differently across insurers.
4 UDC Finance Limited is included as part of ANZ Bank New Zealand Limited’s total assets and is therefore excluded from the NBLI total asset number.