The country's main banks have moved to reassure customers that the New Zealand banking sector is on solid ground.
New Zealand's Australian-owned banks are being hit with the double whammy of tighter global credit and slowing growth.
The first shock came on Friday, when National Australia Bank,
BNZ's parent, announced that $A1.2 billion of securities backed by US home loans, were almost worthless.
On Monday, the ANZ revealed its profits in New Zealand are set to fall by a tenth as it triples its provisions to cover bad debts.
Provisions for bad and doubtful debt will rise 22% to $A1.2 billion in the second half of the financial year. However, ANZ still expects to make more than a $A1 billion profit in 2008.
In a statement issued on Monday night, the Reserve Bank said it is standing by its Financial Stability Report in May, in which it said the financial system has withstood well the global credit crisis of the past year.
ANZ National chief executive Graham Hodges says New Zealand banking overall has a low-risk lending book, and business customers and the rural sector are continuing to perform quite well.
Westpac says there has been no material change since its half yearly update in May, in which it said it was in good shape.
The ASB was not available for comment.
The head of Australasian research for the research house Fat Prophets, Greg Canavan, says other banks will be under pressure to clarify their positions after the ANZ's debt provisioning announcement.
But, he says, there's word in the market the NAB and the ANZ are probably the worst affected.
Massey University Centre for Banking Studies director David Tripe says there are no indications of any imminent problems with New Zealand banks.
Australian Federal Treasurer Wayne Swan says the banks are strong and well regulated and have been transparent with the market about their financial position.
