Knobby22
Mmmmmm 2nd breakfast
- Joined
- 13 October 2004
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It goes into general revenue so if it was needed it wouldn't be there. Its a tax not a levy.
So what's new?
I wonder where the levy money would be kept, for safe keeping, incase it's needed to bail out a bank.lol
The government must think everyone is stupid, not just me.
The Government has already decided to offer a guarantee on bank deposits up to $250k so it has a potential immense liability on its books in the event of a crash.
A Tax/levy could be put aside as an insurance against such an event but in fact if there was a bank crash I suspect the cost would be far higher than the proposed income.
Another way to do this might be to add an extra 1% tax bite to the profits of banks which is then placed in the Future Fund.
To be fair the banks were getting an exceptionally good run with the government guarantee at no cost enabling them to access lower cost funds. And they are doing so well..
Could you please provide evidence that the government guarantee was provided at no cost?To be fair the banks were getting an exceptionally good run with the government guarantee at no cost enabling them to access lower cost funds. And they are doing so well..
Exactly.Yes Kev is on TV telling us that the economy is in great shape, while the RBA is dropping interest rates to stop us going into recession.
Well, about half of them apparently do, sptrawler, however incredible that might be. Short memories for damn sure.I don't think the public believe Kev.
Well, about half of them apparently do, sptrawler, however incredible that might be. Short memories for damn sure.
, bank depositors will face additional costs with the banks certain to pass on a 0.05 per cent insurance levy on deposits up to $250,000.
The government believes the levy will cut the return on a $10,000 deposit by ''less than 50 ¢ per month''.
Modelling suggests it would raise $733 million in its first 18 months, staying in place until a war chest of $15 billion was amassed to bail out banks in trouble. The scheme would start on January 1, 2016.
The banks are understood to have known about the plan since October.
The money would be collected from the banks, not from depositors, and placed in a new Financial Stability Fund, to be administered by the Future Fund or some other government agency, and invested in low-risk, high-quality assets.
Although quarantined for bank bailouts, the levy would be counted as revenue.
It was proposed by the Council of Financial Regulators, chaired by Reserve Bank governor Glenn Stevens, as an insurance payment for the risks the government takes on by guaranteeing their deposits.
The Australian Government supported the funding of the banking system during the GFC with the introduction in October 2008 of the Guarantee Scheme for Large Deposits and Wholesale Funding.
These guarantees provided the banks continued access to funds on competitive terms during the turmoil. They were critical in supporting the continued flow of credit.
The Guarantee Scheme for Large Deposits and Wholesale Funding was removed with effect from 31 March 2010
Thanks Basilio.
I was misinformed. The amount collected will be quarantined.
Rubbish. There was no genuine fear of bank runs in Australia.I believe the Banks were very appreciative of this blanket support for them and the whole financial system. From memory this was the time when overseas banks were experiencing runs the fear of similar events in Australia was very real.
Note "on competitive terms": translation = they paid a fee for the guarantee as I have said earlier.These guarantees provided the banks continued access to funds on competitive terms during the turmoil.
Thanks Basilio.
I was misinformed. The amount collected will be quarantined.
I think the market has overreacted, should be a surge in bank shares today.
Exactly. How is classified as revenue, helping to fill Labor's budget black hole, if it's quarantined, Knobby?I wonder how well it is quarantined, if it is classed as revenue.
Exactly. How is classified as revenue, helping to fill Labor's budget black hole, if it's quarantined, Knobby?
:
Quote Originally Posted by basilio View Post
I believe the Banks were very appreciative of this blanket support for them and the whole financial system. From memory this was the time when overseas banks were experiencing runs the fear of similar events in Australia was very real.
Rubbish. There was no genuine fear of bank runs in Australia. Julia
Despite the funding challenges faced by the banks and the volatility in Australian fixed income and equity markets, it was not until September 2008 that alarm spread outside financial markets. As governments around the world began guaranteeing bank depositors, Australians began to realise that their own deposits were not guaranteed. This led to fears that Australian financial institutions, particularly regional banks and credit unions, could experience a run by depositors, something that none could withstand regardless of the underlying strength of their balance sheets. Fearing the catastrophic effect this could have on the Australian economy, the Federal Government swiftly moved from plans to guarantee sums of up to $20,000 to announcing on 12 October 2008 a comprehensive guarantee of all retail deposits for three years. At the same time, they announced a guarantee scheme for bank wholesale borrowing to ensure Australian banks could compete for funding against other Government-guaranteed banks around the world
I wonder how well it is quarantined, if it is classed as revenue.
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