Wellington - New Zealand's central bank moved Friday to reassure the public that the local banking system was sound despite turbulence in the United States and global financial markets.

"While New Zealand will inevitably feel the effects of major financial shocks such as this, New Zealand banks are not involved in the sort of complex financial transactions that have caused significant losses in many of the large global institutions," Alan Bollard, governor of the Reserve Bank said in a statement.

Bollard spoke out after the New Zealand stock market fell nearly 3.5 per cent on Thursday, its biggest one-day loss in nearly six years.

The benchmark index of top 50 stocks rallied on Friday, rising by 54 points or 1.7 per cent to 3,212.9 by early afternoon after Bollard's statement was issued.

Bollard said that New Zealand banks were not directly involved in the US crisis but were suffering a tightening in the availability of funding in global debt markets, on which they were relatively reliant.

"There is no immediate problem, but the Reserve Bank always stands ready to support the liquidity of the New Zealand financial system," he said. (dpa)