Government to Instate Deposit Insurance
October 13, 2008 New Zealand Finance
In a bid to increase financial confidence, the New Zealand Government has instituted a bank deposit guarantee scheme.
The scheme was announced by Finance Minister Michael Cullen and was brought in under the Public Finance Act. While he went on to say that the government has total confidence in the New Zealand banking sector, the initiative was to ensure confidence from both banks and New Zealand investors. The move follows similar schemes adopted recently by Ireland and Australia.
The Deposit Insurance is currently is pegged at $150 million dollars, and is an optional opt-in scheme, and is planned initially for a two year time period. Currently registered banks and deposits by institutions like building societies and credit unions are eligible for the scheme.
At the time of publication ASB, Westpac and Kiwibank have all indicated that they will participate in the scheme.