Remember people, this is your government (really a corporation) that just lost $200 million of your hard earned Kiwisaver funds to a collapsed Portuguese ‘fail safe’ bank! Do you really still trust them! EnvirowatchRangitikei
By Bernard Hickey: interest.co.nz
Bernard Hickey says the quiet removal of the guarantee for Kiwibank savers should remind all savers about the lack of a deposit guarantee and prompt regulators and the industry to run a public education campaign about NZ”s lack of a deposit guarantee.
Did you know that your money in a term deposit in a bank is not guaranteed by the Government?
Those in the know are aware that there is no Government guarantee, but it turns out most regular people, and certainly most term depositors, either still think there’s a guarantee, or think there’s always has been one.
New Zealand briefly had a government guarantee for retail bank deposits from October 2008 to December 2011. It was introduced at the worst point in the Global Financial Crisis to stop a run of deposits across the Tasman to the banks’ parents in Australia, where the Kevin Rudd Government offered a guarantee for depositors there.
It was quietly dropped once global markets had settled down and was replaced by a system called ‘Open Bank Resolution’. This means there is no Government guarantee and if a bank was to fail, the Reserve Bank would shut it down and manage a capital restructure overnight so that it could re-open the next day. One way a bank’s capital could be restructured by the Reserve Bank is through a ‘hair-cut’ for depositors. Essentially, the Reserve Bank would slice a certain percentage – say 10% – off the value of term deposits to allow the bank to re-open with enough capital to survive.
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Environmental Health Watch NZ 
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