Crown_Retail_Deposit_Guarantee_Scheme

Crown Retail Deposit Guarantee Scheme

Crown Retail Deposit Guarantee Scheme

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The Crown Retail Deposit Guarantee Scheme was an opt-in deposit insurance scheme, established under the Public Finance Act 1989 in New Zealand during the Great Recession, 2008 to 2011. Dr Michael Cullen, Finance Minister at the time of the scheme's introduction said, "The deposit guarantee is designed to give assurance to New Zealand depositors. The New Zealand banking system remains sound. We want to ensure that ordinary New Zealanders feel that their deposits are safe in the current uncertain international financial market conditions."[1]

The scheme guaranteed that the New Zealand Government would repay those who lost money in failed financial institutions. It was implemented on 12 October 2008, administered by Treasury and the Reserve Bank and at its height resulted in Crown guarantees over $133 billion.[2] Ninety-six institutions were covered by the scheme - 60 non-bank deposit takers, 12 banks and 24 collective investment schemes. All guarantees had ended by December 2011.[3]

Finance company failures and bailouts

Nine finance companies out of the thirty accepted into the scheme collapsed. This resulted in the Crown bailing out investors, paying $2 billion to more than 42,000 depositors. The three largest bailouts were of South Canterbury Finance Limited, Allied Nationwide Finance Limited, Equitable Mortgages Limited.[4]

More information Company name, Entry date in scheme ...

See also

References

  1. [1]
    "Deposit guarantee scheme introduced". Reserve Bank of New Zealand. New Zealand Government. 12 October 2008. Archived from the original on 14 October 2008. Retrieved 1 May 2015.
  2. [2]
    "The Treasury: Implementing and managing the Crown Retail Deposit Guarantee Scheme" (PDF). Office of the Auditor-General. New Zealand Government. September 2011. Retrieved 1 May 2015.
  3. [3]
    Weir, James (28 December 2011). "Relief for taxpayers as guarantees end". Stuff.co.nz. Retrieved 1 May 2015.
  4. [4]
    "The Treasury: Implementing and managing the Crown Retail Deposit Guarantee Scheme" (PDF). Office of the Auditor-General. New Zealand Government. September 2011. Retrieved 1 May 2015.
  5. [5]
    "The Treasury: Implementing and managing the Crown Retail Deposit Guarantee Scheme" (PDF). Office of the Auditor-General. New Zealand Government. September 2011. Retrieved 1 May 2015.
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