The Government will invest fees it earns from banks which join its deposit guarantee plan in the nation's pension fund rather than spending them, Finance Minister Michael Cullen says.
Retail and wholesale deposits at banks and other financial institutions will be guaranteed to boost confidence amid global financialmarket turmoil. Institutions will pay a fee depending on their size and credit rating.
"Income from the wholesale deposit guarantee premiums could well run into the hundred of millions of dollars, or even more, depending on the take-up," Cullen said. "
Initially the fees would be "ring-fenced" to ensure they were available to meet any liabilities, Cullen said. Thereafter they would be transferred to the New Zealand Superannuation Fund.
