Bank guarantee becomes law

Wed, 28 Jan 09

The Greens failed yesterday to amend the bill to give banks and their depositors the benefit of a government guarantee over deposits and wholesale bank funding. The guarantee will cover all deposits at Australian authorised deposit taking institutions. Deposits over one million dollars will be covered by the guarantee for a fee. Deposits at foreign bank branches in Australia will not be covered by the government guarantee. Bank borrowings on domestic and international debt markets will also be backed by the commonwealth government for a fee. The Greens wanted to insert a sunset clause on the scheme and introduce more parliamentary accountability.