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ARTICLE · 07 NOVEMBER 2008

Revised Credit Crunch Guarantee Package

On Friday 24 October the Treasurer, Wayne Swan, announced changes to the Federal Government's response to the credit crunch, the Deposit Guarantee and Wholesale Funding Guarantee, and on 28 October, Treasury released "Design and Operational Parameters" for these arrangements.

AustraliaStrategy

On Friday 24 October the Treasurer, Wayne Swan, announced changes to the Federal Government's response to the credit crunch, the Deposit Guarantee and Wholesale Funding Guarantee, and on 28 October, Treasury released "Design and Operational Parameters" for these arrangements.

In this Alert we summarise the arrangements as they currently stand.

Outline of the Package as it currently stands

The package, as it currently stands, involves:

  • a government guarantee for three years for deposits with ADIs (including Australian ADI subsidiaries of foreign banks) of up to $1 million regardless of where the depositor resides;
  • a government guarantee for three years for deposits with ADIs (including Australian ADI subsidiaries of foreign banks) of over $1 million where the ADI "opts in" and pays a fee (which can be passed onto its customers);

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