Abstract
The financial sector of New Zealand has undergone a period of dramatic change since 1984. Following the change of Government in that year, direct controls on the financial sector were largely removed. Removal of direct controls and subsequent legislative amendments to make financial markets more contestable have resulted in significant institutional changes within New Zealand's finance industry. At the end of June 2003 there were 18 registered banks. Under the Reserve Bank of New Zealand Act 1989, the Reserve Bank is required to independently manage monetary policy - the supply of money and credit - to maintain overall price stability. In addition to that, the bank has other two main functions : promoting the maintenance of a sound and efficient financial system and meeting the currency needs of the public.
