15 Oct 2008

NZ deposit guarantee seen as being effective long term

10:03 am on 15 October 2008

A financial commentator says the New Zealand Government's deposit guarantee scheme may be more effective and sensible in the long term than measures being taken in other countries.

Under the scheme, all deposits in banks and non-bank deposit-taking entities will be guaranteed if the institutions choose to take it up.

Once the financial system has stabilised, Brian Gaynor says it will be up to banks to effectively deal with the situation.

Mr Gaynor told Morning Report the Reserve Bank has left possibilities open to widen the scheme, unlike other governments around the world which seem to have exhausted all their options at once.

He said there is likely to be more regulation of banks worldwide as a result of the global financial crisis.