Reserve Bank governor Wheeler not keen on bank deposit insurance due to moral hazard

Wed, 07 Dec 2016

By Sophie Boot Dec. 7 (BusinessDesk) - The Reserve Bank is unlikely to introduce state-backed insurance on bank deposits, saying the moral hazard is too high and it prefers the option of protecting those with small balances through guaranteed repayments. New Zealand is the only country in the OECD without deposit insurance, with Israel's central bank in the process of introducing the state guarantee on bank deposits. Governor Graeme Wheeler told the finance and expenditure committee, at the central bank's annual review this morning, t...

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