A stockbroker says the amount of money set aside by the Government to repay investors under its Retail Deposit Guarantee Scheme should be enough, even if more finance companies go under.
Ninety-six institutions are signed up to the Government's extended scheme, which runs until the end of next year, and about $900 million dollars has been provisioned to cover failures.
The Government is paying $1.6 billion to 35,000 South Canterbury investors covered under the scheme, but the Crown's shortfall should narrow to about $600 million once the finance firm's assets are sold.
At the end of June, the government had paid out close to $80 million to other investors under the guarantee, and it will also pay out Allied Nationwide Finance investors who are owed $130 million.
Kapiti stockbroker Chris Lee says that even if a few smaller finance companies do collapse, the $900 million provision should be more than adequate.