Deposit Takers Act 2023

Depositor compensation scheme - Use of fund to support resolution

231: Bank must calculate maximum amount

You could also call this:

"Banks must work out the maximum amount of money you can get back if your bank fails."

Illustration for Deposit Takers Act 2023

The Bank has to work out the maximum amount you can get from the depositors' compensation scheme. They do this in a way that is decided by the regulations, if there are any. If there are no regulations, the Bank decides how to calculate the maximum amount in a way that they think is right.

The regulations can tell the Bank which methods to use or not use when calculating the maximum amount. They can also say which principles to apply, or how to work out certain values. The regulations might say the Bank has to consider some things, or ignore others, when making their calculation.

The Bank might also have to make some assumptions when working out the maximum amount, as allowed by the regulations. The rules about how the Bank calculates the maximum amount do not change just because the regulations say what the Bank can or cannot do.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS506209.


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230: Bank may use fund to support resolution, or

"The Bank can use a special fund to help a bank in trouble without making things worse for people who have money in the bank."


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232: Maximum amount based on net amount of compensation payable in hypothetical liquidation, or

"How to work out the maximum amount of money depositors can get back if a bank fails"

Part 6Depositor compensation scheme
Use of fund to support resolution

231Bank must calculate maximum amount

  1. The Bank must calculate the maximum amount in the manner—

  2. prescribed by the regulations (if any); or
    1. that the Bank thinks fit (if no regulations apply for the purpose).
      1. The regulations may, in particular, require the Bank to do 1 or more of the following:

      2. to apply, or not to apply, specified methods of calculation:
        1. to apply specified principles:
          1. to assess values or average values at specified dates or over specified periods:
            1. to take specified matters into account in a specified manner:
              1. not to take specified matters into account.
                1. The regulations may also require or permit the Bank to make assumptions.

                2. Subsections (2) and (3) do not limit subsection (1).