Crown Deposit Guarantee Scheme
Scope of Appropriation
This output class is limited to the implementation and operation of the Crown's Deposit Guarantee Scheme excluding expenses incurred in connection with administering claims under a guarantee or indemnity given under the Scheme.
Significant Work Completed During 2009/10
- This report covers the period up to September 2009 when, as part of the decision to offer an extended guarantee scheme for the period from 13 October 2010 to 31 December 2011, a new appropriation covering the operation of the Deposit Guarantee Scheme was introduced.
- Development and refinement of the provisioning methodology for entities considered more likely than not to default.
- Based on the Mascot Finance Limited experience, the Treasury concluded that a more robust and scalable solution to payout was required. Following analysis of the options and tendering, the decision was made to outsource to CIS.
- Provided input into the advice on the need for an extended guarantee scheme and led operational design of the extended scheme.
- Commenced a review of potential modifications to the original scheme with a view to determining whether or not changes were required.
| Performance Dimensions | Target | Performance - provide up-to-date information for the 2009/10 year |
|---|---|---|
| All policy outputs comply with the Treasury's Quality Standards for Policy Advice, as assessed by the Minister three times during the year. | Rated as meeting and frequently exceeding expectations |
Not assessed in 2009/10. Refer to page 60 for further information on the application of the policy standard during 2009/10. |
| No unnecessary delays in processing applications. | Achieved |
Achieved. All applications processed and no unresolved applications as at 30 September 2009. |
| Development and implementation of an overall plan for managing the Crown interests including default events. | Achieved |
Achieved. A prioritised approach to management was developed based on risk ranking (especially probability of default) and scale. As required, the Deposit Guarantee Scheme undertook inspections into entities where additional, more detailed information was considered necessary to enable appropriate management of the Crown's interests in relation to individual entities. A Crisis Response Plan was developed to ensure a co-ordinated approach in the event of further failures. |
| Active monitoring of guaranteed institutions is undertaken to minimise Crown exposure. | Achieved |
Achieved. The Reserve Bank of New Zealand was contracted to deliver monitoring and reporting on non-bank deposit takers participating in the Scheme. The information provided by the Reserve Bank was reviewed and enhancements agreed. |
| The Treasury actively manages the Crown interests in the event of a specific default. | Within seven days of default |
Achieved. Processing of Mascot Finance Limited and Strata Finance Limited defaults substantially completed. Residual claims follow-up and payment managed within Deposit Guarantee Schemes. |
| 2009/10 Actual $000 |
Supp. Estimates - Voted $000 |
Main Estimates $000 |
2008/09 Actual $000 |
|
|---|---|---|---|---|
| Expenses | 437 | 437 | 3,720 | 1,425 |
| Funded by: | ||||
| Revenue Crown | 383 | 410 | 3,720 | 1,410 |
| Other Revenue | 54 | 27 | - | 15 |
