Election 2014

25 Oct 2008

Cullen says NZ looking at detail of Australia's deposit guarantee

11:02 am on 25 October 2008

Finance Minister Michael Cullen says now that Australia has released details of its wholesale deposit guarantee scheme, officials here will see if any refinement of New Zealand's proposal is needed.

Guaranteeing wholesale deposits means a Government is assuring overseas lenders that it will pay up if a bank falls over.

Australia's scheme includes an insurance premium on bank deposits of more than $1 million that would apply to banks, building societies and credit unions, but not investment funds.

Dr Cullen says officials here drafting a scheme will look at Australia's to see if any refinement is needed.

He says once the details of New Zealand's scheme are finalised, banks and others in the financial sector will be consulted.

Dr Cullen says he will ensure National Party finance spokesperson Bill English is briefed and expects an announcement to be made next weekend, preferably when the New Zealand markets are closed.