The Reserve Bank of New Zealand yesterday raised fresh concerns over the structure and duration of the funding of banks generally. In the central bank's periodic Financial Stability Review the RBNZ said it was undertaking a review of its policy on bank liquidity, and wrote that "part of the review is likely to be focused on ensuring banks diversify their funding and lengthen the maturity structure of their debt."The RBNZ noted that of banks' funding sourced outside New Zealand the "residual maturity" was 90 days or less.About 39 per cent of bank funding is sourced from outside New Zealand, and often through the Australian owners of the four major banks (ANZ National, ASB, BNZ and Westpac). Of the 61 per cent of bank funding raised onshore about 70 per cent is retail funding and the balance wholesale funding.The RBNZ otherwise observed in the Financial Stability Review that banks "appear well positioned to absorb the range of credit losses that can reasonably be expected over the course of the cycle", and which are rising.Banks are, however, "less favorably positioned to withstand a scenario under which funding becomes more difficult to access in global markets."The RBNZ wrote that "a more cautious approach to lending on the part of the banks appears prudent".