Stronger capital market rules will help build a more productive economy, Financial Markets Authority chief executive Rob Everett says.
That's because when people have confidence in the markets and trust in the conduct of finance industry participants, they are more likely to invest in productive assets, he says.
And Mr Everett does not believe that tougher regulation has created unnecessary red tape and reduced profits for firms.
"We do get questions from the industry on the timing of the burden landing all at once but I think, generally speaking, in New Zealand there has been a positive reaction to the need to rewrite a lot of the rules."
Mr Everett said he believed the rewrite was manageable and justified.
"If you look back at what's happened globally, and to some of what's happened in New Zealand, it's hard to argue that a lot of the regulation (didn't need) overhauling.
"That's happened in New Zealand in a very sensible and thoughtful way.
"The real challenge now is how we, as the regulators, operate that machinery that's been put in place."
The economy had been damaged in the past when things had gone wrong, particularly in New Zealand, Mr Everett said.