Aussies end guarantee measures
Source: Agencies |
February 8, 2010, Monday
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Print Edition
Print Edition
THE Australian government announced yesterday it will end its guarantee of bank deposits and wholesale funding for domestic banks - measures introduced at the height of the global financial crisis.
The withdrawal of the guarantees is the latest move by policy makers to lift special measures made to confront the crisis, and a further sign that Australia's economy is recovering strongly.
Treasurer Wayne Swan said the guarantees had been vital to keep Australia's financial system stable while other nations' systems were collapsing, ensuring banks kept lending money and kept interest rates down.
"It gave our banks continued access to global capital markets on competitive terms, which has been critical in supporting the flow of credit through the Australian economy," he said in a statement.
Lifting the guarantees will start on March 31, Swan said.
The guarantees were launched in October 2008, and Australian banks and other lenders have so far paid around A$1.1 billion (US$955 million) to use them, and will pay a total of A$5.5 billion by the time the guarantees are withdrawn.
Since late 2008, Prime Minister Kevin Rudd's government launched a more than A$40 billion stimulus spending program, and the central bank slashed interest rates to try to protect the economy.
Australia narrowly avoided recession and its economic recovery has been picking up speed.
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