Krudd Guarantees All Bank Deposits

[GungaDin]

Krudd guarantees all bank deposits

Prime Minister Kevin Rudd has announced that the Government will guarantee all deposits in Australian banks, building societies and credit unions for the next three years.

Mr Rudd has announced the measures in response to the global financial crisis.

He says the Government will guarantee all money that Australian banks borrow internationally and it will stand by all deposits in Australian institutions with no cap on the maximum amount.

"The Australian Government will guarantee all deposits whatever their size in all Australian financial institutions for three years," he said.

Mr Rudd says Australia's institutions are sound, but these measures are needed because other Governments are offering guarantees on their institutions.

"This global financial crisis has entered a new and dangerous phase with real consequences for growth, for jobs and therefore for the future," he said.

The Government is also doubling to $8 billion the amount of mortgage backed securities it will buy.

Mr Rudd says the global crisis will mean higher unemployment in Australia but he says the Government still intends meeting its election commitments.

Earlier, Federal Treasurer Wayne Swan said the Government must be mindful that other countries are guaranteeing all bank deposits.

"We are looking at broadening the scheme and we are getting feedback on what's occurring elsewhere in the world, because we can't operate separately from the rest of the world," he said.

"We have to have a scheme which is broadly compatible with the rest of the world and that's what I've been providing the feedback on."

http://www.abc.net.au/news/stories/2008/10/12/2388681.htm

[Saiyan]

Good news for the Ausies, but how does that help anyone else who’s not an Ausie?

[GungaDin]

It's info for Australians in Thailand on pensions and fixed incomes.

As the owners of this forum don't recognise that Aus is part of S.E.A,

info such as this has to go into general topics.

[jackspratt]

It's info for Australians in Thailand on pensions and fixed incomes.

As the owners of this forum don't recognise that Aus is part of S.E.A,

info such as this has to go into general topics.

Thanks Gunga. As one of the aforementioned Aussies in LOS on fixed incomes ie some bank interest, this is re-assuring. Unfortunately it doesn't help the pension (superannuation) part, but thems the breaks

[ozsamurai]

I predict of course with this announcement the Aussie will have a rebound over the next few week, best buy now folks at 66 to the yen.....my 2 cents..

Oz

[GungaDin]

I predict of course with this announcement the Aussie will have a rebound over the next few week, best buy now folks at 66 to the yen.....my 2 cents..

Oz

I hope you're right.

[ozsamurai]

I trade against the yen....yesterday 66.1 over night up to 69.15, lets hope it moves further..... 3 cents on the dollar not bad, want more?

[Sparkles]

Krudd guarantees all bank deposits

Prime Minister Kevin Rudd has announced that the Government will guarantee all deposits in Australian banks, building societies and credit unions for the next three years.

Mr Rudd has announced the measures in response to the global financial crisis.

He says the Government will guarantee all money that Australian banks borrow internationally and it will stand by all deposits in Australian institutions with no cap on the maximum amount.

"The Australian Government will guarantee all deposits whatever their size in all Australian financial institutions for three years," he said.

Mr Rudd says Australia's institutions are sound, but these measures are needed because other Governments are offering guarantees on their institutions.

"This global financial crisis has entered a new and dangerous phase with real consequences for growth, for jobs and therefore for the future," he said.

The Government is also doubling to $8 billion the amount of mortgage backed securities it will buy.

Mr Rudd says the global crisis will mean higher unemployment in Australia but he says the Government still intends meeting its election commitments.

Earlier, Federal Treasurer Wayne Swan said the Government must be mindful that other countries are guaranteeing all bank deposits.

"We are looking at broadening the scheme and we are getting feedback on what's occurring elsewhere in the world, because we can't operate separately from the rest of the world," he said.

"We have to have a scheme which is broadly compatible with the rest of the world and that's what I've been providing the feedback on."

http://www.abc.net.au/news/stories/2008/10/12/2388681.htm

At 12 noon today ,Monday, the Oz dollar had moved to .67 UP from .65 Friday at close of business. So heading in the right direction ,long may it continue.

[geriatrickid]

Nice move, but are Australians panicing or something? I don't get it since the Australian banking system is solvent and wasn't anywhere near collapse. At least Australi's finances are ok. Would a similar move in Thailand reassure anyone the same way? No offense to my Thai friends, but I think they'd still run on the bank to withdraw their 500 baht savings.

[MiG16]

moving this to the Jobs and Economy section

[Gravelrash]

Good news for the Ausies, but how does that help anyone else who's not an Ausie?

Just lets you reflect again on your misfortune not being born in God's Own Country.

As the banking system there does seem quite solid then it will cost the government nothing, but adds confidence. For me pleased my parents accounts are 100% secure.

[BEENTHEREDONETHAT]

Good news for the Ausies, but how does that help anyone else who's not an Ausie?

You don't have to be an aussie to have savings there. And next to New Zealand they have one of the best interest rates around. You have to pay a 10% tax on the earnings in Australia (non-citizen). In New Zealand you pay a 2% service fee on the earnings, no tax.

[bendix]

The New Zealand government has done the same thing, so that's comforting news for Kiwis too.

I don't think it's a panic move. Both the Aussie and NZ central banks have been saying for months that the key banks are very stable (particularly in NZ) because they didnt indulge in the bad loans business to the extent of other countries. My sense is that it's designed to shore up confidence to prevent possible outflows to other countries.

On the currency rebounds, I have just come back from Singapore this evening. The Singapore press had an intersting story that it is now impossible to buy Aussie and NZ dollars at the numerous money dealers around town - they have simply ran out. They've been bought be people who can see what is very very obvious - both currencies have been massively oversold and are likely to rebound soon.

[BEENTHEREDONETHAT]

The New Zealand government has done the same thing, so that's comforting news for Kiwis too.

I don't think it's a panic move. Both the Aussie and NZ central banks have been saying for months that the key banks are very stable (particularly in NZ) because they didnt indulge in the bad loans business to the extent of other countries. My sense is that it's designed to shore up confidence to prevent possible outflows to other countries.

On the currency rebounds, I have just come back from Singapore this evening. The Singapore press had an intersting story that it is now impossible to buy Aussie and NZ dollars at the numerous money dealers around town - they have simply ran out. They've been bought be people who can see what is very very obvious - both currencies have been massively oversold and are likely to rebound soon.

I think you are right bendix, hopefully it isn't wishfull thinking.

[bendix]

It's already happening. Ozzie dollar has broken through 72 cents today, up from around 67 at its lowest last week. Kiwi, of course, is following its big brother's lead.

But let's not kid ourselves. Both currencies have been ridiculously overvalued for the last year. I think they're just gonna find their way back to fair value levels of around 80 for the Ozzie and 70-73 for the Kiwi.