New Zealand introduces legislation to guarantee deposits

New Zealand introduces legislation to guarantee deposits

By Lucy Kramer

WELLINGTON (Reuters) – New Zealand Finance Minister Grant Robertson said on Thursday that new legislation had been submitted to Parliament that would formalize a scheme to protect depositors from loss if deposit takers fail.

Robertson said the plan would guarantee deposits of up to 100,000 New Zealand dollars (58,190 US dollars) in eligible institutions and increase supervision of deposit recipients.

New Zealand is one of only two OECD countries that do not currently have deposit insurance.

“The absence of depositor protection has been a long-standing gap in New Zealand’s financial safety net. This legislation bridges that gap,” said Robertson.

The bill gives the Reserve Bank of New Zealand the ability to set standards for banks as a key tool for enforcing prudential requirements, updating regulations and supervising all deposit takers.

A bill must be passed by Parliament before it can become law.

(1 dollar = 1.7185 New Zealand dollars)

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