The Commonwealth Government has announced the withdrawal of its Guarantee Scheme for Large Deposits and Wholesale Funding effective from 5pm on 31 March 2010.
The announcement does not affect the Financial Claims Scheme, which will continue protection of deposits of up to $1 million in authorised deposit-taking institutions (ADIs) until the cap is reviewed in October 2011.
The Council of Financial Regulators – consisting of the heads of the Reserve Bank, Treasury, ASIC and APRA – has advised the Government that bank funding conditions have improved such that the Guarantee is no longer needed, and that no Australian institution will need the Guarantee to fund themselves.
Existing guaranteed liabilities of ADIs will continue to be covered by the Guarantee to maturity for wholesale funding and term deposits, or to October 2015 for at call deposits. The final date for ADIs to apply for access to the Guarantee is 24 March 2010.
