Changes may be made to the Government's deposit guarantee scheme following the failure of Mascot Finance.
The company owes about $70 million to 2557 investors. It was allowed to join the scheme in January, four months after it stopped taking on new investors as economic conditions deteriorated.
Mascot reported a loss of more than $7 million in 2008 and stopped taking deposits in September.
Prime Minister John Key has asked Finance Minister Bill English to investigate the processes the Treasury used to approve the company's application to join the scheme.
Mr English says the way the application was handled needs to be checked to see if improvements can be made that will better protect taxpayer money.
He says further finance company collapses cannot be ruled out, but the Government will continue to honour the deposit guarantee scheme, which was set up in October last year by the previous government.
Reserve Bank wants review
Reserve Bank Governor Alan Bollard is calling for a review of the deposit guarantee scheme.
The central bank's role is to seek assurances from trustees that finance companies are complying with their trust deed before they can be brought under the scheme.
Dr Bollard says the Reserve Bank is leaning on trustees to ensure they are making the appropriate checks, but the guarantee was very rushed after the Reserve Bank of Australia announced its own scheme without warning in October last year.
He says officials did a good job but it is not perfect, and now is an appropriate time to review its design.
Dr Bollard says it would be unrealistic to expect no payments to be made from the scheme.
