The Governor of the Reserve Bank has rejected Green Party accusations of bias in favour of the Australian-owned banks in New Zealand.
Graeme Wheeler says he takes his role in overseeing the banks seriously and rejects any allegations of bias.
The Greens say Mr Wheeler misled Parliament's finance and expenditure select committee last month when he said local banks weren't doing well compared to developed country peers.
Mr Wheeler made his comments when talking about the Reserve Bank's latest financial stability report.
Co-leader Russel Norman says information provided by the central bank shows bank returns on assets are the fifth highest in the OECD.
Dr Norman says more needs to be done to rein in excessive bank profits and when the Reserve Bank is run by someone who so strongly favours banking it's unlikely the banks will be pulled into line.
In a statement released on Tuesday afternoon, Mr Wheeler stood by his earlier statements but emphasised a range of different measures when assessing bank profitability.
He released figures showing the local banks' returns on equity, once tax is paid, were below average for banks outside the eurozone between 2009 and 2011.
Mr Wheeler says profits in the New Zealand banking system reflect relatively low levels of non-performing loans, and low cost-to-income ratios, compared with many countries.
He says the Reserve Bank takes its mandate to supervise the banking system seriously and without favour.
Finance minister dismisses criticism
Finance Minister Bill English says MPs will have the opportunity to question Mr Wheeler about the matter when he appears again before the finance and expenditure select committee this week (to answer questions on the December monetary policy statement).
But Mr English dismissed Dr Norman's criticism, saying any information he has seen is consistent with what the Governor had said.
"I think this is about Russel Norman competing with the Labour Party to be Opposition finance spokesman, but actually the only one in there with experience is (New Zealand First leader) Winston Peters."
Labour Party finance spokesperson David Parker is also certain the matter will be raised at the select committee on Thursday but he doesn't believe Mr Wheeler is biased.
"I think he's principled. I don't agree with all of his principles, but I don't think he's biased."
Prime Minister John Key called Dr Norman's criticism nonsense
Banks 'contribute billions'
The head of the Bankers Association says discussing bank profit in isolation is short-sighted and fails to take into account the contribution banks make to the New Zealand economy.
Chief executive Kirk Hope told Radio New Zealand's Morning Report programme that the contribution banks make to the economy should not be overlooked.
Banks employ more than 25,000 people, and in order to generate their profit banks last year spent some $6 billion within the economy, he said.