“This is the socialisation
of banking.
“The Minister of Finance is saying 93
percent of bank customers don’t care about bank stability
because the taxpayer will bail them out.
“Deposit
insurance puts New Zealand taxpayers on the hook for
banks’ risk-taking and increases instability in our
financial system. It creates a moral hazard, that is banks
and savers will take bigger risks because they’re
insured.
“The OECD reported ‘a study of banking
crises from the beginning of the 1980s to the mid-1990s’
found the presence of an explicit deposit insurance scheme
tends to increase the probability of such events’ and can