Sunday 12th October 2008 |
Text too small? |
Finance Minister Michael Cullen will use his powers under the Public Finance Act to introduce an opt-in retail deposit guarantee scheme, he said in a statement emailed to BusinessWire.
“We want to ensure that ordinary New Zealanders feel that their deposits are safe in the current uncertain international financial market conditions,” Cullen said.
The announcement came after finance chiefs from the Group of Seven nations meeting in Washington vowed to “take all necessary steps to unfreeze credit and money markets” and prevent major banks from collapsing. Australia’s government is introducing a scheme this week to guarantee bank deposits up to A$20,000.
New Zealand’s will be an opt-in scheme, covering retail deposits from banks, building societies, credit unions and deposit-taking finance companies who chose to participate.
The scheme will be free for institutions with total retail deposits under $5 billion and large firms will be charged 10 basis points a year. That means a bank with $20 billion in retail deposits would pay $15 million in annual fees, according to Cullen’s statement.
The guarantee is for two years, giving finance markets time to stabilize, he said.
No comments yet
Second St John withdrawal of labour takes effect tomorrow with further strikes likely
Sanford Appoints Independent Director
CRP ADVISES CLOSURE OF SHARE OFFER TO EXISTING INVESTOR
Devon Funds Morning Note - 14 August 2024
OCR 5.25% - Monetary restraint tempered as inflation converges on target
Consumers still need due diligence as new deposit takers emerge.
Woolworths strike: staff asked to dress up in Disney costumes for a week on their own dollar
Turners Invests in Quashed Online Insurance Platform
PGW Reports on Challenging Year
Arvida Announces Executive Team Changes