Bank Deposit Guarantee = BAD NEWS
- Thread starter numbercruncher
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personally tho ........ i wouldnt trust the guarantee as far as i could throw it ...
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yeah m8 , thats how i originally read it too , i think someone just tried to put a scare up me
cheers have a great evening
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I've heard the total of deposits is around $1.3tr.
Australia was at a huge disadvantage if it didn't follow the lead of other developed economies so Rudd's hand was forced on this. The currency has stopped falling since - for now. Anyhow, it's a crazy promise IMO.
Here's a list of those that are guaranteed and those that are not.
The following deposits are included in this guarantee:
Conventional cheque accounts
Conventional call accounts
Conventional saving accounts
Conventional term deposits
Farm management deposits
Cash management accounts
Pass-book savings accounts
Personal current account bearing interest electronic access (whether or not account also has cheque access)
Personal current at call account bearing interest with cheque and high transaction capabilities
Personal basic account
Personal at call account, not earning interest, but with high transaction capabilities
Pensioner deeming accounts
At call cash management and savings account (earning high yield with limited transaction capability)
Standard fixed rate term deposit
Bonus incentive investment accounts
Debit card accounts
(Separate) mortgage offset accounts. Can be either 100 per cent or partial offset.
Trustee accounts
Other transaction accounts
Retirement savings accounts (at call and term RSAs)
First home savers accounts
This is not an exhaustive list.
List of Eligible Institutions for the Guarantee of Wholesale Funding and the Guarantee of Deposits
Australian-owned banks
Adelaide Bank Limited
AMP Bank Limited
Australia and New Zealand Banking Group Limited
Bank of Queensland Limited
Bendigo and Adelaide Bank Limited
Commonwealth Bank of Australia
Commonwealth Development Bank of Australia Limited (a subsidiary of Commonwealth Bank of Australia)
Elders Rural Bank Limited
Macquarie Bank Limited
Members Equity Bank Pty Limited
National Australia Bank Limited
St. George Bank Limited
Suncorp-Metway Limited
Westpac Banking Corporation
Building Societies
ABS Building Society Ltd
B & E Ltd
Greater Building Society Ltd
Heritage Building Society Limited
Home Building Society Ltd
Hume Building Society Ltd
IMB Ltd
Lifeplan Australia Building Society Limited
Maitland Mutual Building Society Limited
Newcastle Permanent Building Society Limited
The Rock Building Society Limited
Wide Bay Australia Ltd
Credit Unions
Alliance One Credit Union Ltd
AMP Credit Union Ltd
Austral Credit Union Limited
Australian Central Credit Union Ltd
Australian Country Credit Union Ltd (trading as Reliance Credit Union)
Australian Defence Credit Union Limited
AWA Credit Union Limited
Bananacoast Community Credit Union Ltd
Bankstown City Credit Union Ltd
Berrima District Credit Union Ltd
Big Sky Credit Union Ltd
Broadway Credit Union Ltd
CAPE Credit Union Limited
Capital Credit Union Ltd
Capricornia Credit Union Ltd
Central Murray Credit Union Limited
Central West Credit Union Limited
Circle Credit Co-operative Limited
Coastline Credit Union Limited
Collie Miners Credit Union Ltd
Community Alliance Credit Union Limited
Community CPS Australia Limited
Community First Credit Union Limited
Companion Credit Union Limited
Comtax Credit Union Limited
Country First Credit Union Ltd
Credit Union Australia Ltd
CSR and Rinker Employees Credit Union Limited
Defence Force Credit Union Limited
Dnister Ukrainian Credit Co-operative Limited
Electricity Credit Union Ltd
Encompass Credit Union Limited
Esso Employees' Credit Union Ltd
Eurobodalla Credit Union Ltd
Family First Credit Union Limited
Fire Brigades Employees' Credit Union Limited
Fire Service Credit Union Limited
Firefighters & Affiliates Credit Co-operative Limited
First Choice Credit Union Ltd
First Option Credit Union Limited
Fitzroy & Carlton Community Credit Co-operative Limited
Ford Co-operative Credit Society Limited
Gateway Credit Union Ltd
Geelong & District Credit Co-operative Society Limited
GMH (Employees) Q.W.L. Credit Co-operative Limited
Goldfields Credit Union Ltd
Gosford City Credit Union Limited
Goulburn Murray Credit Union Co-operative Limited
H.M.C. Staff Credit Union Ltd
Heritage Isle Credit Union Limited
Holiday Coast Credit Union Ltd
Horizon Credit Union Ltd
Hunter Mutual Limited
Hunter United Employees' Credit Union Limited
Industries Mutual Credit Union Limited
Intech Credit Union Limited
Karpaty Ukrainian Credit Union Limited
La Trobe Country Credit Co-operative Limited
La Trobe University Credit Union Co-operative Limited
Laboratories Credit Union Limited
Latvian Australian Credit Co-operative Society Limited
Lithuanian Co-operative Credit Society "Talka" Limited
Lysaght Credit Union Ltd
MacArthur Credit Union Ltd
Macquarie Credit Union Limited
Maleny and District Community Credit Union Limited
Manly Warringah Credit Union Limited
Maritime, Mining & Power Credit Union Limited
Maroondah Credit Union Ltd
MECU Limited
Melbourne University Credit Union Limited
MemberFirst Credit Union Limited
MyState Financial Credit Union of Tasmania Limited
New England Credit Union Ltd
Newcom Colliery Employees Credit Union Ltd
Northern Inland Credit Union Limited
Nova Credit Union Limited
NSW Teachers Credit Union Ltd
Old Gold Credit Union Co-operative Limited
Orange Credit Union Limited
Phoenix (N.S.W.) Credit Union Limited
Plenty Credit Co-operative Limited
Police & Nurses Credit Society Limited
Police Association Credit Co-operative Limited
Police Credit Union Limited
Polish Community Credit Union Ltd
Powerstate Credit Union Ltd
Pulse Credit Union Limited
Qantas Staff Credit Union Limited
Queensland Country Credit Union Limited
Queensland Police Credit Union Limited
Queensland Professional Credit Union Ltd
Queensland Teachers' Credit Union Limited
Queenslanders Credit Union Limited
Railways Credit Union Limited
RegionalOne Credit Union Limited
Resources Credit Union Limited
R.T.A. Staff Credit Union Limited
Satisfac Direct Credit Union Limited
Savings and Loans Credit Union (S.A.) Ltd
Select Credit Union Limited
Service One Credit Union Limited
SGE Credit Union Limited
Shell Employees' Credit Union Limited
South West Slopes Credit Union Ltd
Southern Cross Credit Union Ltd
South-West Credit Union Co-operative Limited
St Mary's Swan Hill Co-operative Credit Society Limited
StateWest Financial Services Limited
Sutherland Credit Union Ltd
Sutherland Shire Council Employees' Credit Union Ltd
Sydney Credit Union Ltd
Tartan Credit Union Ltd
The Broken Hill Community Credit Union Ltd
The Gympie Credit Union Ltd
The Police Department Employees' Credit Union Limited
The Summerland Credit Union Limited
The TAFE and Community Credit Union Ltd
The University Credit Society Limited
Traditional Credit Union Limited
TransComm Credit Co-operative Limited
United Credit Union Limited
Victoria Teachers Credit Union Limited
Wagga Mutual Credit Union Ltd
Warwick Credit Union Ltd
WAW Credit Union Co-operative Limited
Westax Credit Society Ltd
Woolworths Employees' Credit Union Limited
Wyong Council Credit Union Ltd
Other ADIs
Cairns Penny Savings & Loans Limited
Australian Settlements Limited
Cuscal Limited
Indue Ltd
Foreign subsidiary banks
Arab Bank Australia Limited
Bank of China (Australia) Limited
Bank of Cyprus Australia Limited
BankWest (the trading name of Bank of Western Australia Ltd, a foreign subsidiary bank following its sale to Bank of Scotland in December 1995)
Citigroup Pty Limited
HSBC Bank Australia Limited
ING Bank (Australia) Limited
Investec Bank (Australia) Limited
Laiki Bank (Australia) Ltd
Rabobank Australia Limited (a subsidiary of Rabobank Nederland from October 1994)
These institutions below are authorised depository institutions but from our understanding are NOT included in guarantee scheme
Branches of Foreign Banks
ABN AMRO Bank N.V.
Allied Irish Banks, Public Limited Company
Bank of America, National Association
Bank of China Limited
Bank of Scotland plc
Bank of Tokyo-Mitsubishi UFJ, Ltd
Barclays Capital (the trading name of Barclays Bank plc)
BNP Paribas
09 December 1992
18 September 1986
Citibank, N.A.
Credit Suisse
Deutsche Bank Aktiengessellschaft
Fortis Bank SA/NV
HSBC Bank plc
Industrial and Commercial Bank of China Limited
ING Bank N.V.
JPMorgan Chase Bank, National Association
Mega International Commercial Bank Co., Ltd.
Mizuho Corporate Bank, Ltd.
Oversea-Chinese Banking Corporation Limited
Rabobank Nederland (the trading name of Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A.)
Royal Bank of Canada
Société Générale
Standard Bank Plc
Standard Chartered Bank
State Bank of India
State Street Bank and Trust Company
Sumitomo Mitsui Banking Corporation
The Hongkong and Shanghai Banking Corporation Limited
The Royal Bank of Scotland Plc
The Toronto-Dominion Bank
Taiwan Business Bank
UBS AG
United Overseas Bank Limited
WestLB AG
Australia was at a huge disadvantage if it didn't follow the lead of other developed economies so Rudd's hand was forced on this. The currency has stopped falling since - for now. Anyhow, it's a crazy promise IMO.
Here's a list of those that are guaranteed and those that are not.
The following deposits are included in this guarantee:
Conventional cheque accounts
Conventional call accounts
Conventional saving accounts
Conventional term deposits
Farm management deposits
Cash management accounts
Pass-book savings accounts
Personal current account bearing interest electronic access (whether or not account also has cheque access)
Personal current at call account bearing interest with cheque and high transaction capabilities
Personal basic account
Personal at call account, not earning interest, but with high transaction capabilities
Pensioner deeming accounts
At call cash management and savings account (earning high yield with limited transaction capability)
Standard fixed rate term deposit
Bonus incentive investment accounts
Debit card accounts
(Separate) mortgage offset accounts. Can be either 100 per cent or partial offset.
Trustee accounts
Other transaction accounts
Retirement savings accounts (at call and term RSAs)
First home savers accounts
This is not an exhaustive list.
List of Eligible Institutions for the Guarantee of Wholesale Funding and the Guarantee of Deposits
Australian-owned banks
Adelaide Bank Limited
AMP Bank Limited
Australia and New Zealand Banking Group Limited
Bank of Queensland Limited
Bendigo and Adelaide Bank Limited
Commonwealth Bank of Australia
Commonwealth Development Bank of Australia Limited (a subsidiary of Commonwealth Bank of Australia)
Elders Rural Bank Limited
Macquarie Bank Limited
Members Equity Bank Pty Limited
National Australia Bank Limited
St. George Bank Limited
Suncorp-Metway Limited
Westpac Banking Corporation
Building Societies
ABS Building Society Ltd
B & E Ltd
Greater Building Society Ltd
Heritage Building Society Limited
Home Building Society Ltd
Hume Building Society Ltd
IMB Ltd
Lifeplan Australia Building Society Limited
Maitland Mutual Building Society Limited
Newcastle Permanent Building Society Limited
The Rock Building Society Limited
Wide Bay Australia Ltd
Credit Unions
Alliance One Credit Union Ltd
AMP Credit Union Ltd
Austral Credit Union Limited
Australian Central Credit Union Ltd
Australian Country Credit Union Ltd (trading as Reliance Credit Union)
Australian Defence Credit Union Limited
AWA Credit Union Limited
Bananacoast Community Credit Union Ltd
Bankstown City Credit Union Ltd
Berrima District Credit Union Ltd
Big Sky Credit Union Ltd
Broadway Credit Union Ltd
CAPE Credit Union Limited
Capital Credit Union Ltd
Capricornia Credit Union Ltd
Central Murray Credit Union Limited
Central West Credit Union Limited
Circle Credit Co-operative Limited
Coastline Credit Union Limited
Collie Miners Credit Union Ltd
Community Alliance Credit Union Limited
Community CPS Australia Limited
Community First Credit Union Limited
Companion Credit Union Limited
Comtax Credit Union Limited
Country First Credit Union Ltd
Credit Union Australia Ltd
CSR and Rinker Employees Credit Union Limited
Defence Force Credit Union Limited
Dnister Ukrainian Credit Co-operative Limited
Electricity Credit Union Ltd
Encompass Credit Union Limited
Esso Employees' Credit Union Ltd
Eurobodalla Credit Union Ltd
Family First Credit Union Limited
Fire Brigades Employees' Credit Union Limited
Fire Service Credit Union Limited
Firefighters & Affiliates Credit Co-operative Limited
First Choice Credit Union Ltd
First Option Credit Union Limited
Fitzroy & Carlton Community Credit Co-operative Limited
Ford Co-operative Credit Society Limited
Gateway Credit Union Ltd
Geelong & District Credit Co-operative Society Limited
GMH (Employees) Q.W.L. Credit Co-operative Limited
Goldfields Credit Union Ltd
Gosford City Credit Union Limited
Goulburn Murray Credit Union Co-operative Limited
H.M.C. Staff Credit Union Ltd
Heritage Isle Credit Union Limited
Holiday Coast Credit Union Ltd
Horizon Credit Union Ltd
Hunter Mutual Limited
Hunter United Employees' Credit Union Limited
Industries Mutual Credit Union Limited
Intech Credit Union Limited
Karpaty Ukrainian Credit Union Limited
La Trobe Country Credit Co-operative Limited
La Trobe University Credit Union Co-operative Limited
Laboratories Credit Union Limited
Latvian Australian Credit Co-operative Society Limited
Lithuanian Co-operative Credit Society "Talka" Limited
Lysaght Credit Union Ltd
MacArthur Credit Union Ltd
Macquarie Credit Union Limited
Maleny and District Community Credit Union Limited
Manly Warringah Credit Union Limited
Maritime, Mining & Power Credit Union Limited
Maroondah Credit Union Ltd
MECU Limited
Melbourne University Credit Union Limited
MemberFirst Credit Union Limited
MyState Financial Credit Union of Tasmania Limited
New England Credit Union Ltd
Newcom Colliery Employees Credit Union Ltd
Northern Inland Credit Union Limited
Nova Credit Union Limited
NSW Teachers Credit Union Ltd
Old Gold Credit Union Co-operative Limited
Orange Credit Union Limited
Phoenix (N.S.W.) Credit Union Limited
Plenty Credit Co-operative Limited
Police & Nurses Credit Society Limited
Police Association Credit Co-operative Limited
Police Credit Union Limited
Polish Community Credit Union Ltd
Powerstate Credit Union Ltd
Pulse Credit Union Limited
Qantas Staff Credit Union Limited
Queensland Country Credit Union Limited
Queensland Police Credit Union Limited
Queensland Professional Credit Union Ltd
Queensland Teachers' Credit Union Limited
Queenslanders Credit Union Limited
Railways Credit Union Limited
RegionalOne Credit Union Limited
Resources Credit Union Limited
R.T.A. Staff Credit Union Limited
Satisfac Direct Credit Union Limited
Savings and Loans Credit Union (S.A.) Ltd
Select Credit Union Limited
Service One Credit Union Limited
SGE Credit Union Limited
Shell Employees' Credit Union Limited
South West Slopes Credit Union Ltd
Southern Cross Credit Union Ltd
South-West Credit Union Co-operative Limited
St Mary's Swan Hill Co-operative Credit Society Limited
StateWest Financial Services Limited
Sutherland Credit Union Ltd
Sutherland Shire Council Employees' Credit Union Ltd
Sydney Credit Union Ltd
Tartan Credit Union Ltd
The Broken Hill Community Credit Union Ltd
The Gympie Credit Union Ltd
The Police Department Employees' Credit Union Limited
The Summerland Credit Union Limited
The TAFE and Community Credit Union Ltd
The University Credit Society Limited
Traditional Credit Union Limited
TransComm Credit Co-operative Limited
United Credit Union Limited
Victoria Teachers Credit Union Limited
Wagga Mutual Credit Union Ltd
Warwick Credit Union Ltd
WAW Credit Union Co-operative Limited
Westax Credit Society Ltd
Woolworths Employees' Credit Union Limited
Wyong Council Credit Union Ltd
Other ADIs
Cairns Penny Savings & Loans Limited
Australian Settlements Limited
Cuscal Limited
Indue Ltd
Foreign subsidiary banks
Arab Bank Australia Limited
Bank of China (Australia) Limited
Bank of Cyprus Australia Limited
BankWest (the trading name of Bank of Western Australia Ltd, a foreign subsidiary bank following its sale to Bank of Scotland in December 1995)
Citigroup Pty Limited
HSBC Bank Australia Limited
ING Bank (Australia) Limited
Investec Bank (Australia) Limited
Laiki Bank (Australia) Ltd
Rabobank Australia Limited (a subsidiary of Rabobank Nederland from October 1994)
These institutions below are authorised depository institutions but from our understanding are NOT included in guarantee scheme
Branches of Foreign Banks
ABN AMRO Bank N.V.
Allied Irish Banks, Public Limited Company
Bank of America, National Association
Bank of China Limited
Bank of Scotland plc
Bank of Tokyo-Mitsubishi UFJ, Ltd
Barclays Capital (the trading name of Barclays Bank plc)
BNP Paribas
09 December 1992
18 September 1986
Citibank, N.A.
Credit Suisse
Deutsche Bank Aktiengessellschaft
Fortis Bank SA/NV
HSBC Bank plc
Industrial and Commercial Bank of China Limited
ING Bank N.V.
JPMorgan Chase Bank, National Association
Mega International Commercial Bank Co., Ltd.
Mizuho Corporate Bank, Ltd.
Oversea-Chinese Banking Corporation Limited
Rabobank Nederland (the trading name of Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A.)
Royal Bank of Canada
Société Générale
Standard Bank Plc
Standard Chartered Bank
State Bank of India
State Street Bank and Trust Company
Sumitomo Mitsui Banking Corporation
The Hongkong and Shanghai Banking Corporation Limited
The Royal Bank of Scotland Plc
The Toronto-Dominion Bank
Taiwan Business Bank
UBS AG
United Overseas Bank Limited
WestLB AG
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ACTUALLY, THE IDEA OF AN UNLIMITED GUARANTEE IS TO PREVENT A PROBLEM OF COLLAPSE AND PAYOUTS IN THE FIRST PLACE SO IT MAY WORK OUT CHEAPER THAN A CAPPED PLAN.
THANKS.
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Re: Bank Deposit Guarantee = BADNEWS ...
Trouble is, there's nobody alive who has done it before so we've got not choice but to learn on the job.
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Re: Bank Deposit Guarantee = BADNEWS ...
I presume Super Funds in cash in TD's are included ?
If it does hit the fan the guarantee may be worthless, there's no money to cover it all.
I presume Super Funds in cash in TD's are included ?
If it does hit the fan the guarantee may be worthless, there's no money to cover it all.
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Although there may be some consequences from the guarentee, I think overall it was a sensible approach. Many people were concerned and were ringing radio stations talking about putting money under their beds etc.
When a $20K limit was suggested by Labor, Turnball, in typical self serving style, harped on and tried to make a political point saying it should be $100K.
I saw someone ring SkyBusiness Your Money, Your Call and said well should I seperate my fathers $500K into 5 accounts - so its covered?
Well, what was Labor to do? No matter what they said, it wouldn't have been enough, and now its too much. He DID discuss it with the RBA and the governor had agreed with it.
Unlimited gurantees stops all fear in the community, but most importantly it was a tactical move by Labor to counter Turnball.
Just as the Economic Stimulus blessed their voting base, Working Families, and resolved the Pensioner payment nonsense started again, by the ever noisy twit called Turnball.
I am no staunch Labor supporter, but frankly this isn't the time to be running around being distruptive and nit picking every thing. If there is a problem, lets fix it, not jump around the media circus pointing fingers.
Rudd's support has increased, and I think finally Labor are learning how to play politics. If Turnball, and the Liberals generally keep going the way they are, I reckon Labor will cruise it in next election, with an increased majority.
When a $20K limit was suggested by Labor, Turnball, in typical self serving style, harped on and tried to make a political point saying it should be $100K.
I saw someone ring SkyBusiness Your Money, Your Call and said well should I seperate my fathers $500K into 5 accounts - so its covered?
Well, what was Labor to do? No matter what they said, it wouldn't have been enough, and now its too much. He DID discuss it with the RBA and the governor had agreed with it.
Unlimited gurantees stops all fear in the community, but most importantly it was a tactical move by Labor to counter Turnball.
Just as the Economic Stimulus blessed their voting base, Working Families, and resolved the Pensioner payment nonsense started again, by the ever noisy twit called Turnball.
I am no staunch Labor supporter, but frankly this isn't the time to be running around being distruptive and nit picking every thing. If there is a problem, lets fix it, not jump around the media circus pointing fingers.
Rudd's support has increased, and I think finally Labor are learning how to play politics. If Turnball, and the Liberals generally keep going the way they are, I reckon Labor will cruise it in next election, with an increased majority.
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Kevin Rudd to change blanket guarantee on bank deposits
"SUPER rich Australians with more than $1 million in the bank will be forced to pay insurance to guarantee their savings"
Anyone know how much the insurance will cost?
"SUPER rich Australians with more than $1 million in the bank will be forced to pay insurance to guarantee their savings"
Anyone know how much the insurance will cost?
GreatPig
Pigs In Space
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theasxgorilla
Problem solved... next bubble.
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No, actually, I think he was probably making an educated point. Sweden moved to guarentee 500,000 SEK, or approximately 100,000 AUD.
For interest sake, the most overvalued currency in the G10 bloc of currencies according to Danske bank is the SEK. The most undervalued is the AUD. This disparity has shortened by some 13% since Rudd's announcement the weekend before last, but unfortunately the policy was lacking finesse.
He thought he'd issue a knock-out blow to the AUD-killing guarantees by governments like Germany, Ireland and Sweden. Instead he has succeeded in drawing funds away from investment banks, who can ill afford the capitalisation problems, and into guaranteed vehicles like term deposits.
It's fine to encourage saving and protect the AUD (lest inflation really starts to bite as interest rates come down), but his team failed to meter the consequences of their policy properly.
I heard on the news late last night there was 1 bank that froze accounts and wouldnt allow and withdrawals? also challenger said people could get their money it just would take a while...
here is some info on it but cant find much
http://www.infochoice.com.au/Home/NewsViews/tabid/99/Default.aspx?ArticleId=35059&count=10
here is some info on it but cant find much
http://www.infochoice.com.au/Home/NewsViews/tabid/99/Default.aspx?ArticleId=35059&count=10
Kauri
E/W Learner
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Rudd must read this forum.... he has taken note and is going to ammend the scheme...
Cheers
..........Kauri
Cheers
..........Kauri
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Hmmmm..... 7 BILLION $100 notes? I'd like to see that printing press!
Both Turnbull & Rudd know it's financial rhetoric designed to placate the ignorant or uninformed ie most of the population. Expect to see it get watered down even further?
Both Turnbull & Rudd know it's financial rhetoric designed to placate the ignorant or uninformed ie most of the population. Expect to see it get watered down even further?
Julia
In Memoriam
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The obvious consequence of the bank guarantee is money moving from cash management trusts and mortgage trusts into the safe bank deposits.
Unsurprisingly these organisations are protesting that the legislation is unfair and want the government to guarantee all their deposits as well!
What about the moral hazard here? If the guarantee is extended to market linked investments, i.e. Challenger, what is to stop people and companies taking extraordinary risks, safe in the knowledge that they will be bailed out?
e.g. remember Fincorp?
Unsurprisingly these organisations are protesting that the legislation is unfair and want the government to guarantee all their deposits as well!
What about the moral hazard here? If the guarantee is extended to market linked investments, i.e. Challenger, what is to stop people and companies taking extraordinary risks, safe in the knowledge that they will be bailed out?
e.g. remember Fincorp?
Julia
In Memoriam
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Given Ken Henry's emphatic assertion that the Reserve Bank approved the government's guarantee announcement a couple of weekends ago, Malcolm Turnbull and Julie Bishop look more than a little silly in the face of their overblown rhetoric during the past few days.
From what I can gather, the key issue comes down to different forms of regulation and oversight when it comes down to mortgage funds or cash management trusts which excluded them from the scheme.
Traditional depository institutions in Australia are overseen by APRA, those other funds are not. This is why they were left out.
Unless the others wish to sit down to be fully regulated by APRA, they are never going to get any sort of guarantee from the government. For some I'd imagine it would be almost impossible, as they have to subject themselves to BASEL II requirements for strict ratios of capital, methods of reporting and things such as this. Not something they can change quickly.
Government's position seems to be that unless it's APRA monitored, they would not covered. Given that these are apparently given to the strictest regulation and monitoring, the Government wouldn't want to involve themselves with anything else due to risk.
The guarantee also effectively put a stop to many possible mergers which seemed on the cusp of occurring (ANZ+NAB was mentioned, Suncorp+CBA), which for the financial consumer probably would have meant reduced competition, and the same issue of moral hazard in the long run - this time even larger institutions "too large to fail". Once you know you're in this group, you are probably going to take more risks also.. e.g. Freddie Mac & Freddie Mae in the US
It's a curly one..
Traditional depository institutions in Australia are overseen by APRA, those other funds are not. This is why they were left out.
Unless the others wish to sit down to be fully regulated by APRA, they are never going to get any sort of guarantee from the government. For some I'd imagine it would be almost impossible, as they have to subject themselves to BASEL II requirements for strict ratios of capital, methods of reporting and things such as this. Not something they can change quickly.
Government's position seems to be that unless it's APRA monitored, they would not covered. Given that these are apparently given to the strictest regulation and monitoring, the Government wouldn't want to involve themselves with anything else due to risk.
The guarantee also effectively put a stop to many possible mergers which seemed on the cusp of occurring (ANZ+NAB was mentioned, Suncorp+CBA), which for the financial consumer probably would have meant reduced competition, and the same issue of moral hazard in the long run - this time even larger institutions "too large to fail". Once you know you're in this group, you are probably going to take more risks also.. e.g. Freddie Mac & Freddie Mae in the US
It's a curly one..
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No moral hazard when they know that the promise can't be kept. As long as there is even a credible assumption that our money is safe it should suffice, but bottom line is if there was a genuine run on the banks they (the government) cannot possibly hope to cover/guarantee it.
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Ha! Time for the shakedown!!!!!
So there is a fee to large depositors? Over $1m gets a fee.
Great..lets strip out the rhetoric and bull**** and this is what I hear...
Swan "The very simple answer is the fee will be paid by all depositors. either the fee will be paid by the depositor, or the bank."
Sir O "Oh **** we can't guarantee this amount of funds....stuff it we'll turn it into a tax instead."
THE proposed government levy for guaranteeing bank deposits of more than $1 million will be charged regardless of whether the investor wants it or not. Wayne Swan said today the new revenue raiser, which the Australian Bankers Association has described as a tax, will not allow for any investors to “opt out” of the scheme.
Sir O "And we will spread the tax as far as we can. And think of all those smart people who took their gains out of the market in November...hey they can afford a tax."
Mr Swan said today the Government would not be releasing the correspondence between Treasury Secretary Ken Henry and Reserve Bank governor Glenn Stevens on a possible cap on the bank deposit - the subject of heated exchanges in Senate estimates today.
"I don't see why we would be publishing all of the advice or any of the advice that is coming through from individual agencies or between individual agencies," Mr Swan said.
Sir O "And when people disagree with what we are doing we'll try and smother the dissension and present a united front"
Ok Mister you wanna try and shake me down?
Sir O flips Mr Swan the finger and opens a safety deposit box at the bank. There 999,900 in the bank. Happy now?
Sir O
So there is a fee to large depositors? Over $1m gets a fee.
Great..lets strip out the rhetoric and bull**** and this is what I hear...
Swan "The very simple answer is the fee will be paid by all depositors. either the fee will be paid by the depositor, or the bank."
Sir O "Oh **** we can't guarantee this amount of funds....stuff it we'll turn it into a tax instead."
THE proposed government levy for guaranteeing bank deposits of more than $1 million will be charged regardless of whether the investor wants it or not. Wayne Swan said today the new revenue raiser, which the Australian Bankers Association has described as a tax, will not allow for any investors to “opt out” of the scheme.
Sir O "And we will spread the tax as far as we can. And think of all those smart people who took their gains out of the market in November...hey they can afford a tax."
Mr Swan said today the Government would not be releasing the correspondence between Treasury Secretary Ken Henry and Reserve Bank governor Glenn Stevens on a possible cap on the bank deposit - the subject of heated exchanges in Senate estimates today.
"I don't see why we would be publishing all of the advice or any of the advice that is coming through from individual agencies or between individual agencies," Mr Swan said.
Sir O "And when people disagree with what we are doing we'll try and smother the dissension and present a united front"
Ok Mister you wanna try and shake me down?
Sir O flips Mr Swan the finger and opens a safety deposit box at the bank. There 999,900 in the bank. Happy now?
Sir O
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