Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Deposit Guarantee Scheme Provides Extra Security For Depositors

The deposit guarantee scheme announced today by the government will provide even more security for people who have bank deposits.

“Our banks are among the best capitalised and regulated in the world. We saw their strength and resilience through the global financial crisis, when there were no bank failures or bailouts in New Zealand. And, again recently, through the economic impact of Covid-19, where our banks were able to help affected households and businesses get through.

“New Zealand’s banks are a very reliable place to keep your money. Today’s announcement will provide depositors with an extra layer of security for their money in the unlikely event of a bank failure,” says New Zealand Bankers’ Association chief executive Roger Beaumont.

“A deposit guarantee scheme has been well signalled by the government. We look forward to working through the scheme’s detail.

“One issue that will need working through is how the levies to fund the scheme are applied to participating entities. We support a risk-based approach to setting levies where lower risk entities, such as banks, pay lower levies because they are less likely to call on the scheme.

“Another factor to take into account are higher minimum capital requirements to be phased in for banks. That comes at a high cost for banks and is intended to help our banks withstand a one-in-200-year shock.

“It will also be important to work through how the scheme fits in with the broader crisis management frameworks. That includes the Reserve Bank’s Open Bank Resolution policy, which can, among other things, draw on deposits to help keep a bank afloat in the case of a potential failure.

“We look forward to working with the government on the proposed legislation,” Beaumont says.

 

Link to media release

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Government: Delivering Lower Card Fees To Business

Commerce and Consumer Affairs Minister David Clark has today announced the Government’s next steps to reduce merchant service fees, that banks charge businesses when customers use a credit or debit card to pay, which is estimated to save New Zealand businesses ... More>>

SEEK NZ Employment Report: April 2021

OVERVIEW OF APRIL 2021: STATE OF THE NATION: April, for the second consecutive month, saw the highest number of jobs ever advertised on seek.co.nz. Applications per job ad fell 9% month-on-month (m/m). SEEK job ads were up by 12% m/m. SEEK job ads were ... More>>

Commerce Commission: Warns Genesis Over Business Billing Errors

The Commerce Commission has issued a warning to Genesis Energy Limited about billing errors concerning electricity line charges to business customers. Genesis reported the errors to the Commission. The Commission considers that Genesis is likely to ... More>>

Stats: Lower Job Security Linked To Lower Life Satisfaction

People who feel their employment is insecure are more likely than other employed people to rate their overall life satisfaction poorly, Stats NZ said today. New survey data from the March 2021 quarter shows that 26 percent of employed people who thought ... More>>

The Conversation: The Outlook For Coral Reefs Remains Grim Unless We Cut Emissions Fast — New Research

A study of 183 coral reefs worldwide quantified the impacts of ocean warming and acidification on reef growth rates. Even under the lowest emissions scenarios, the future of reefs is not bright. More>>

The Conversation: Why Now Would Be A Good Time For The Reserve Bank Of New Zealand To Publish Stress Test Results For Individual Banks

Set against the backdrop of an economy healing from 2020’s annus horribilis , this week’s Financial Stability Report (FSR) from the Reserve Bank (RBNZ) was cautiously reassuring: the country’s financial system is sound, though vulnerabilities remain. More>>