New rules now Percy. The government is saying no financial assistance from taxpayers. The shareholders and depositors carry the cost with Open Bank Resolution.
Can you imagine what it would do to business confidence if there was a bail-in and depositor’s funds were confiscated? The economy would tank. This would affect businesses as well as savers. Putting funds in finance companies was a choice and it was savings. With a bank there is no choice - you have to have a bank for your day to day transactions, especially for businesses.
Open Bank Resolution (OBR) is a long-standing Reserve Bank policy aimed at allowing a distressed bank to be kept open for business, while placing the cost of a bank failure primarily on the bank’s shareholders and creditors, rather than the taxpayer.
https://www.rbnz.govt.nz/regulation-and-supervision/banks/open-bank-resolution
For me this changes the rules of commerce. Now the money owed to an unsecured creditor remains as a debt until the business is wound up. With OBR the bank continues in business and the creditor doesn’t get all their money back, because some is confiscated. I accept that the government can confiscate assets but I don’t think a private business should be able to even with government approval. With OBR depositors get punished for bank’s bad behaviour.