The government is to close its wholesale funding guarantee scheme at the end of April.
The facility was set up in November 2008, following the global financial crisis.
Finance Minister Bill English announced the end date at the New Zealand Australia Investment Forum, being held in Auckland.
"It helped our banks access funding during that crisis, but international market conditions have improved - and continue to improve in 2010. New Zealand banks are now raising funds without using the guarantee, which was always envisaged as a temporary measure for extraordinary times."
English's announcement follows confirmation last month that the Australian wholesale funding guarantee will end on 31 March.
"We don't expect there will be any further use of the facility between now and the end of April," say English.
He says the move was made after consultation between Treasury, the Reserve Bank and major New Zealand banks, as well as some international investment banks.
Other countries have also ended their guarantee schemes or are in the process of doing so.
Ross Cuthbert from Craigs Investment Partners says it's a very positive announcement.
The New Zealand and australian banks came through the credit crisis very well and they are easily raising money now in the wholesale markets, so the backstop that was provided by that government guarantee...they don't really need it now," he says.
The wholesale guarantee facility is separate from the retail deposit guarantee scheme.
No changes are planned for the retail deposit scheme beyond those announced last year, which take effect from 13 October 2010.
Since the wholesale guarantee was set up, 24 guarantee certificates have been issued, covering $10.3 billion of borrowing by banks.
The scheme has made no payouts and the Government will receive almost $290 million in fees.
