Breakfast briefing: What is the purpose of deposit insurance?

Here's our summary of key economic events overnight that affect New Zealand, with news deposit insurance and financial stability are getting involved in an unhealthy mix. Meanwhile, regulators are reviewing their deposit insurance scheme, one that was found wanting during the recent turmoil. The RBNZ is due to institute a deposit guarantee scheme here, so they will no doubt be assessing what lessons they can draw from all this. The Canadian PMI was out overnight too and recorded a tiny expansion with price pressures not easing. The political pressure is to lower the policy rate levels to give highly-leveraged households debt-payment relief despite the unusually high level of inflation.