Deposit guarantee scheme gets tweaked

The changes, announced by Treasury gives non-bank deposit takers a "stand down" period in the face of a potential default before invoking the scheme.

Also participating financial institutions the ability to offer both covered and uncovered debt securities, as well as giving them a 14-day stand down period to allow a company under threat time to avoid receivership if it's able to resolve its issues.

The tweak also gives the government the ability to set a timeframe for claims to be made once a guaranteed deposit has been defaulted.

"Existing investments by eligible depositors are not affected by these changes - they continue to benefit from the current Crown guarantee," Treasury's director of financial operations Brian McCulloch said in a statement. "This change provides greater flexibility for deposit taking entities and improves consistency between the current scheme which ends on October 12 2010 and the extension scheme."