New Zealand banks seem geared to meet the Reserve Bank's new prudential liquidity policy with improvement in wholesale funding conditions also coinciding with a lengthening of maturity profile of funding, particularly offshore funding.In a sign of easing conditions in wholesale markets, banks made non-guaranteed bond issuances in September both in domestic and in offshore markets. This was in sharp contrast to only guaranteed bond issuances mostly from offshore markets the month before.September was the first month since at least February when banks raised money via non-guaranteed bond issues in the offshore market, the Reserve Bank of New Zealand said in its half-year Financial Stability Review, published yesterday.The RBNZ has noted that banks have been able to raise the maturity profile of issuances via the US commercial paper market.Banks have also boosted their holdings of traditional liquid assets by more than NZ$9.2 billion over the past year, which also bodes well for the new liquidity policy that requires their liquid asset holdings to be higher than in recent years.While competition for retail deposits remains sharp, and has pulled down margins over recent quarters, the RBNZ said they now appear to have stabilised. One of the broadest measures of bank margins, which is the ratio of net interest income to income earning assets, has been fairly stable in recent quarters and is currently around 2.1 per cent, according to the RBNZ (though once again this used June half data).