Moody's on New Zealand's banking system 17 August 2009 4:40PM Philip Bayley Following on from the release of its "Asia Banking Outlook 2009" report in June, in which it stated that the outlook for the Australian and New Zealand banking systems is negative, Moody's Investor Service last week released a report specifically on the New Zealand banking system. Moody's has not changed its view but, that said, the outlook is in line with that placed on most banking systems, globally.Moody's observes that despite the challenges it faces, the banking system remains sound and the Reserve Bank of New Zealand has been proactive in reinforcing financial stability in the system. The most recent action was the release of a new Liquidity Policy in June 2009, setting out the RBNZ's policy on the management of liquidity risk by registered banks. In addition, regulatory initiatives in 2008 included the introduction of a retail deposit guarantee scheme and wholesale funding guarantee facility, and the expansion of central bank repo facilities.