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Deposit Takers Act 2023

Crisis management and resolution - Preliminary provisions

259: Additional purposes of this Part

You could also call this:

"What else this part of the law is trying to achieve to help banks in trouble and keep the financial system safe."

Illustration for Deposit Takers Act 2023

This part of the law has some extra goals. You want to stop big problems in the financial system when a bank or other deposit taker is in trouble. This means keeping important activities running and stopping people from losing trust in the system. You also want to help a bank in trouble be dealt with in a calm and organised way. This part of the law supports other parts of the law, like Part 6, and tries to reduce costs when a bank is in trouble.

When a bank is in trouble, you want to protect the people who lent it money and make sure they get their money back in the right order. You also want to deal with the problem quickly and stop the government from having to use public money to fix it. The term public money means the money that belongs to the government and the public.

This section of the law does not change what is said in section 3.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS528402.

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Part 7Crisis management and resolution
Preliminary provisions

259Additional purposes of this Part

  1. This Part has the following purposes (in addition to those set out in section 3):

  2. to avoid significant damage to the financial system that could result from a licensed deposit taker being in financial distress or other difficulties, including—
    1. by maintaining the continuity of systemically important activities undertaken by licensed deposit takers in New Zealand; and
      1. by mitigating, or otherwise managing, any loss of confidence in the financial system resulting from a licensed deposit taker being in financial distress or other difficulties; and
      2. to enable a licensed deposit taker that is in resolution to be dealt with in an orderly manner; and
        1. to support the purpose of Part 6; and
          1. to the extent not inconsistent with any of paragraphs (a), (b), and (c), to minimise the costs of dealing with, or costs or losses otherwise incurred in connection with, a licensed deposit taker that is in financial distress or other difficulties by—
            1. preserving the interests of creditors and maintaining the ranking of claims of creditors; and
              1. dealing with the financial distress or other difficulties as quickly as is reasonably practicable; and
              2. to the extent not inconsistent with any of paragraphs (a), (b), and (c), to support the effective and efficient management of public financial resources by avoiding or minimising, and otherwise managing, the need to rely on public money to deal with a licensed deposit taker that is in financial distress or other difficulties.

                1. In this Part, public money has the same meaning as in section 2(1) of the Public Finance Act 1989.

                2. This section does not limit section 3.