Australia drops bank funding guarantee

Australia has said it will withdraw its bank funding guarantee due to improved conditions, ending a scheme put in place at the height of the global financial crisis.

Treasurer Wayne Swan yesterday said the Council of Financial Regulators had recommended ending the measure which he said had been vital in stabilising Australia's banking system "when others were collapsing across the globe".

Under the scheme, first announced on October 12, 2008, the government guaranteed the wholesale debt obligations of Australian banks if the financial institutions paid a fee.

 

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