Deposit safety to be guaranteed

Deposit safety to be guaranteed

The Rudd government plans to implement a scheme to guarantee the first $20,000 of a deposit in the event of a bank collapse.
Depositors who lost more than this would have to wait for the institution to be liquidated or taken over by another banks to get the rest of their money back.
If there was still a shortfall this could be made up by charging other banks a levy. Consumer groups have welcomed the initiative but the Australian Bankers Association has warned that it is not fair or necessary.
Chief executive David Bell said that no deposits had been lost by Australian institutions since the 1890s.
"It is not good policy that a poorly run institution that fails should have to be bailed out by well run institutions that spend time and money on making sure they are properly run and protecting depositors," he said.

Source: The Australian

 

Great,

Give more paranoia to those that think they should spread their bank accounts through different banks...

Can't they just increase the number of Commonwealth Government Securities held by the banks?

So much easier, ohh, it's a PR exercise...

 

Sometimes I think that they simply refuse to acknowledge that 2x2 = 4.