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IntroHello. I'm Bernard Hickey with the daily briefing from interest.co.nz...Today, we'll look at whether New Zealand should have a bank deposit insurance scheme, just like in other countries,And we'll look at the latest on housing prices and official interest rates, where some are now calling on the Reserve Bank to cut rates. We'll explain why they're wasting their time.Story 1, But firstly, we look at whether New Zealand should have a bank deposit insurance scheme.Most people here don't give much thought to whether they might lose their money if they put it in the bank.Surely the bank is safe? We haven't had a bank collapse and surely some one would stop that from happening.Well actually, there are no formal guarantees about the safety of your bank deposits. Aside from the shareholders at the big 4 Australian banks, we have no guarantees.Now the assumption is that the government would bail out one of those banks if they got into trouble, but that's only an assumption and a big one at that.New Zealand is unusual in that it doesn't have a deposit insurance scheme. Britain has one. The United States has one. Even Zimbabwe has one.The Reserve Bank has argued that a deposit insurance scheme raised a "moral hazard" risk. It says bank managers might lend willy nilly if they knew their depositors were safe, or that depositors wouldn't bother to check out their bank if they knew it was insured.I believe that argument is flawed. No one is checking out the bank now and the idea that bank managers would operate more riskily with deposit insurance is tenuous at best.We need a deposit insurance scheme for say the first 50,000 or 100,000 dollars. These are nervous times and anything that prevents a run on a good bank is a good idea.Story 2Now for a quick look at what the Treasury is now saying about the housing market.It has warned that it is slowing down much faster than it expected previously.It says higher retail mortgage interest rates and lower net migration are to blame for a slowdown that could push prices down this year.Treasury is not the first to say this. The Reserve Bank said last week it saw house prices as 20-30% over valued and that prices could fall 5% this year.Now we have some banks calling for the Reserve Bank to cut interest rates to boost the economy. The ANZ has suggested things are slowing quickly and the central bank should act now.Even Mark Weldon, the head of the NZX, is saying there should be a rate cut.There's a couple of problems with this. New Zealand still has an inflation problem and the Reserve Bank needs to beat that.And secondly, any cut in the official cash rate would be a waste of time for consumers in particular.That's because fixed mortgage rates, which covers almost 90% of home owners, are based off wholesale market rates, and those rates are if anything rising because of turmoil on global financial markets.New Zealanders will have to just deal with higher interest rates. It may means house prices will fall and the economy will slow. But that's the price we all pay for going on a 5 year long debt-fuelled consumption and house buying binge. It's time for the hangover and no amount of Berocca from the Reserve Bank is going to fix it.I'm Bernard Hickey from interest.co.nz with the Daily Briefing. Catch you on Tuesday.