Crown Retail Deposit Guarantee Scheme


The Crown Retail Deposit Guarantee Scheme was an opt-in deposit insurance scheme, established under the Public Finance Act 1989 in New Zealand during the Great Recession, 2008 to 2011. Dr Michael Cullen, Finance Minister at the time of the scheme's introduction said, "The deposit guarantee is designed to give assurance to New Zealand depositors. The New Zealand banking system remains sound. We want to ensure that ordinary New Zealanders feel that their deposits are safe in the current uncertain international financial market conditions."
The scheme guaranteed that the New Zealand Government would repay those who lost money in failed financial institutions. It was implemented on 12 October 2008, administered by Treasury and the Reserve Bank and at its height resulted in Crown guarantees over $133 billion. Ninety-six institutions were covered by the scheme - 60 non-bank deposit takers, 12 banks and 24 collective investment schemes. All guarantees had ended by December 2011.

Finance company failures and bailouts

Nine finance companies out of the thirty accepted into the scheme collapsed. This resulted in the Crown bailing out investors, paying $2 billion to more than 42,000 depositors. The three largest bailouts were of South Canterbury Finance Limited, Allied Nationwide Finance Limited, Equitable Mortgages Limited.
Company nameEntry date in schemeFailure dateAmount paid out
Allied Nationwide Finance Limited19 November 200820 August 2010$131.0m
Equitable Mortgages Limited4 December 200826 November 2010$140.2m
Mascot Finance Limited12 January 20092 March 2009$70.0m
Mutual Finance Limited13 November 200814 July 2010$9.2m
Rockforte Finance Limited20 February 200910 May 2010$4.0m
South Canterbury Finance Limited19 November 200831 August 2010$1,580.3m
Strata Finance Limited19 November 200831 August 2010$0.5m
Viaduct Capital Limited13 November 200814 May 2010$7.6m
Vision Securities Limited5 December 20081 April 2010$30.0m