Banks guarantee to be withdrawn
9 Feb 2010
Australian financial system looking strong
On Sunday, the federal government announced it would be withdrawing it’s guarantee scheme for banks, as it is no longer needed given the strength inherent in our financial system.
The scheme was introduced at the height of the global financial crisis in order to help the nation’s banks borrow funds from overseas, which ensured the stability of the market during the testing times.
The federal government treasurer, Wayne Swan said that so far the scheme had paid around $1.1 billion for the use of the guarantee and until the scheme is completely faded out will pay around $5.5 billion.
Without the scheme, banks would have been forced to lend less and increased interest rates which would have greatly stalled the economic growth required to rebound from the recession.
For the complete article click here, or visit the Sydney Morning Herald Website.
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