Disclaimer:
The
Deed of Guarantee is in draft and the terms subject to change up to the point of
signing.
The information posted as Question and Answers are provided for
general guidance only and cannot be relied on as definitive. In particular
please note that the final terms of the Deed will prevail to govern any
guarantee arrangement.
The information posted as Questions and Answers are
subject to ongoing clarification, addition and amendment. The Reserve
Bank's general disclaimer also applies to
information on this page.
Finance Minister Michael Cullen has announced that, using his powers under
the Public Finance Act, the government is to introduce an opt-in retail deposit
guarantee scheme.
"The scheme will cover all retail deposits of
participating New Zealand-registered banks and retail deposits by locals in
non-bank deposit-taking entities. This would include building societies, credit
unions and deposit-taking finance companies," he said.
The deposit
guarantee scheme does not include related party liabilities.
The new
scheme is an opt-in scheme and would take the form of a bilateral contractual
agreement between the Crown and the individual institutions which take up the
guarantee.
The scheme will be free for institutions with total retail
deposits under $5 billion. A fee of ten basis points per annum will be
charged on total deposits above $5 billion. This means that a bank with $20
billion in retail deposits would pay $15 million in fees per annum.
The
government is offering this deposit guarantee to address the current situation
of international financial market turbulence and it will be for a two-year term
in the first instance. This will give time to see how well international
financial markets stabilise in the months ahead.
"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," Dr Cullen said.
The Reserve Bank will be releasing further
details later today.
Contact:
[email protected]
For information about the deposit guarantee scheme and for all enquires visit the Treasury website.