The government has signalled moves to make the banking system safer for customers, and to make sure executives are held to account.
A bank deposit guarantee scheme will give customers better protection if their bank was to go under.
Finance Minister Grant Roberston told Morning Report focus on setting the amount of savings protected had been ensuring the everyday New Zealand bank depositer would be covered.
"It does sit at the lower end of international comparatives, although when you look at countries with similar GDP per capita and similar concentration of banking services it's in the ball park.
"It's a balance between making sure we cover those everyday investors but also deal with the moral hazard argument - that don't want to cover all the risk for a scheme like this."
It was only one tool in a financial safety net, he said, along with the requirement for banks to have capital to cope with financial emergencies, the regulatory system, supervision and penalties.
How the scheme would be funded is still to be decided, although Mr Robertson said most countries did so with a bank levy.
"That's the part of the scheme we're designing, most of these schemes around the world rely on a bank levy, supported by government intervention as required.
Finance Minister Grant Robertson. Photo: RNZ / Dom Thomas
"That bank levy is usually built up over time, over a number of years, hence why you need some sort of government backstop while it is being created," he said.
A backstop would require taxpayer funding, and Mr Robertson could not rule out banks passing on the cost of a levy to its customers, running the risk the public will be the ones hit in the pocket.
"We can't be certain about that obviously, but what we've seen from jurisdictions around the world is that these things find a way of washing through the system and you know competitive forces will come into play," he said.
