The Government is consulting on options for maintaining confidence in the financial system when the Retail Deposit Guarantee Scheme expires at the end of this year.
The scheme was put in place during the global financial crisis.
It has been criticised for distorting flows of money as investors placed money with non-banks when the guarantee was put in place but withdrew when it was expected to expire last year. The cost of the scheme, which was toughened up when it was extended, also fell mostly on banks.
The guarantee now protects only $2 billion of the $210 billion New Zealanders have on deposit and will not be extended beyond December 31, Finance Minister Bill English said.
- NZPA
Govt considers policy after end of deposit guarantee
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