IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this article

Understanding financial system efficiency in New Zealand

Listed author(s):

This article examines the concept of financial system efficiency in the New Zealand context. The primary function of the financial system is to facilitate the allocation of society’s scarce resources, both across the economic system and over time, in an environment of inherent uncertainty. If the financial system performs this role well, then it will be contributing to economic growth and prosperity in a positive way. The article develops a conceptual framework for evaluating financial system efficiency and applies this to the New Zealand financial system. In particular, we focus on whether the high return on equity enjoyed by the New Zealand banking system, relative to other jurisdictions, is indicative of a banking system that is any less competitive and efficient than elsewhere. Our research to date suggests these high relative returns can be explained by a number of factors including relatively high cost of capital in New Zealand and the implicit support the major banks receive from their Australian parents.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: no

Article provided by Reserve Bank of New Zealand in its journal Reserve Bank of New Zealand Bulletin.

Volume (Year): 74 (2011)
Issue (Month): (June)
Pages: 26-38

in new window

Handle: RePEc:nzb:nzbbul:june2011:4
Contact details of provider: Postal:
P.O. Box 2498, Wellington

Phone: 64 4 471-3767
Fax: 64 4 471-2270
Web page:

More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

in new window

  1. Allen Berger & Leora Klapper & Rima Turk-Ariss, 2009. "Bank Competition and Financial Stability," Journal of Financial Services Research, Springer;Western Finance Association, vol. 35(2), pages 99-118, April.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:nzb:nzbbul:june2011:4. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Reserve Bank of New Zealand Knowledge Centre)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.