Correction added on 26 September 2012 after first online publication on 13 September 2012. The article title should be ‘Insuring for a Crisis: Deposit Insurance and the GFC, the Australian and New Zealand Experience’ instead of ‘Insuring for a Crisis: Deposit Insurance and the GFC, the Experience of OECD Countries’. This has been corrected in this version of the article.
Insuring for a Crisis: Deposit Insurance and the GFC, the Australian and New Zealand Experience*
Article first published online: 13 SEP 2012
© 2012 The Economic Society of Australia
Economic Papers: A journal of applied economics and policy
Volume 31, Issue 3, pages 359–368, September 2012
How to Cite
Jain, A., Keneley, M. and Thomson, D. (2012), Insuring for a Crisis: Deposit Insurance and the GFC, the Australian and New Zealand Experience. Economic Papers: A journal of applied economics and policy, 31: 359–368. doi: 10.1111/j.1759-3441.2012.00182.x
- Issue published online: 13 SEP 2012
- Article first published online: 13 SEP 2012
Vol. 31, Issue 4, 525, Article first published online: 7 JAN 2013
- deposit insurance;
- New Zealand
Deposit insurance schemes were an important element in policy responses to the global financial crisis (GFC). There has been considerable debate about the nature and efficacy of such policy measures in alleviating the fallout from financial crises. The GFC highlighted problems associated with deposit insurance schemes including moral hazard, coverage limits, co-insurance, cross border issues and market distortions. Despite these shortcomings, deposit insurance schemes were able to ameliorate the financial panic experienced and reduce contagion. This paper evaluates the Australian and New Zealand experience with deposit insurance introduced in response to the GFC, and compares this to the OECD experience. It reflects on the performance of deposit insurance schemes considered against the attributes of good policy design, and evaluates the specific problems and strengths encountered during the GFC.