Alan Bollard, governor of the Reserve Bank of New Zealand, yesterday expressed concern at the funding approach of banks and in particular their increasing preference to raise wholesale funding at terms of little more than 12 months.In published remarks for a speech to the International Symposium of the Bank of France last night Bollard said that banks in New Zealand and Australia "have accepted a significant amount of short-term capital flows in order to minimise funding costs."We want to look at whether the vulnerabilities that this can create have been adequately priced and managed - noting that some of the costs of a liquidity event are probably externalities that would ultimately be borne by other New Zealand parties."Bollard didn't elaborate. However, based on their activities in public wholesale debt markets, banks have tended to raise liabilities with terms of between 12 and 18 months over recent months and have tended to baulk at the pricier rates on liabilities with longer durations unless raising hybrid capital or subordinated debt (as Bank of New Zealand and ANZ National have sought to do in New Zealand recently).