“The government’s deposit insurance system is the kind of moral hazard madness that led to the GFC,” says David Seymour, leader of ACT.

“It’s the socialization of the bank.

“The finance minister says that 93% of bank customers don’t care about the stability of banks because the taxpayer will bail them out.

“Deposit insurance puts New Zealand taxpayers at the mercy of bank risk-taking and increases the instability of our financial system. This creates moral hazard, meaning that banks and savers will take greater risks because they are insured.

“The OECD has reported that a ‘study of banking crises from the early 1980s to the mid-1990s” found that the presence of an explicit deposit guarantee scheme tends to increase the likelihood of such events “and may “Increase the risk of reckless behavior in individual banks”.

“The World Bank and the International Monetary Fund claim that deposit insurance “tends to undermine the stability of banks” and creates a “lack of market discipline”.

“Taking charge of the financial stability of the banking system continues Robertson’s model of megalomania.

“Not content with dictating which routes Air New Zealand should take, he’s now telling the Reserve Bank how it should lend.

“If the goal is greater accountability for financial stability in the banking system, Robertson should have vested power in the board of directors of the Reserve Bank, much like it does with the Authority. financial markets.

“Instead of transferring the regulatory power for financial decision-making powers from the governor to the board, he transferred the power to himself. He correctly identified the problem of too much power entrusted to one individual, the Governor of the Reserve Bank, and incorrectly solved it by transferring the solution to himself.

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