The European financial crisis has prompted the Reserve Bank of New Zealand to give New Zealand banks an extra six months to bolster their Core Funding Ratios.The RBNZ's move appears to be the first instance of a national banking supervisor delaying the introduction of tougher standards in the face of the euro-crisis. It may also fuel debate about New Zealand and Australian timetables for moving their banks to the tougher Basel III capital standards.The RBNZ introduced the CFR last year, aiming to reduce liquidity risk by requiring banks to match 70 per cent of their loans and advances with retail deposits and wholesale funds with maturities of greater than one year.In its latest half-yearly Financial Stability Report, released yesterday, the RBNZ said it would defer the CFR's planned June 2012 increase from 70 to 75 per cent.Many NZ banks have already built up their CFRs to close to 75 per cent. But RBNZ deputy governor Grant Spencer told a media conference that the RBNZ wanted banks to be able to "use the liquidity buffers that they've built up".Forcing banks to raise costly funds in a difficult market has the potential to hurt the NZ economy by cutting credit availability and raising costs."We don't want to put unnecessary pressure on the banks, in light of what's happening in the global funding market," Spencer said. "We don't want to put additional pressure on credit."Spencer also said it was possible that the rise to 75 per cent could be delayed beyond January 2013.He denied that the CFR delay could be seen as a loosening of monetary policy, but said it would influence the bank's December monetary policy review.The RBNZ warned in its report that global market disruption also poses risks to New Zealand's indebted farm sector and to mortgage-holders.But NZ banks are better placed to weather shocks than in 2008, the report said; they have increased their capital buffers, lengthened their maturity profiles and raised more funds from depositors and long-term wholesale lenders. They can also count on liquidity support from the RBNZ, if needed.The RBNZ's comments echo those being made about Australian bank funding by the Australian Prudential Regulation Authority (APRA).