The Green Party is calling for the Government to do more to protect New Zealanders, should banks fail.

Israel has just introduced deposit insurance, leaving us as the only OECD country with no measure to protect customer savings if a bank fails.

Green co-leader James Shaw said it wouldn't be hard to follow the lead of others, and make a change.

"It would be a small levy placed on the banks, which would go into an insurance fund. It's been operating successfully in many, many other countries."

But Mr Shaw said the Government and Reserve Bank keep putting off the change, saying customers can choose the bank they believe is most stable.

"Consumers are not well educated about the stability of banks, so what that means is they tend to flow to the really big Australian-owned banks."

The Green Party is concerned savers could be vulnerable, if similar circumstances to the 1980s BNZ bail-out were to happen again.

But Banking Association chief executive Karen Scott-Howman said the Reserve Bank has a system in place, ready for the unlikely event of a bank failure.

"New Zealand banks are well regulated and well funded so bank failures are extremely rare in New Zealand and we don't expect that to change."

She said the Reserve Bank has an Open Bank Resolution system, which provides a crisis management tool, like deposit insurance does.

"It's designed to provide a back up plan in the unlikely event of a bank failure and I think New Zealanders can take great comfort from that."

Ms Scott-Howman said it will ultimately be up to Government to decide whether deposit insurance in needed in New Zealand.