The Rudd government will enlist the help of the big four banks to improve liquidity for institutions not covered by the deposit guarantee scheme.
Speaking at the Business Council of Australia dinner last night Kevin Rudd said the government was working with the industry to ensure a secure, strong and diverse financial system, according to The Australian Financial Review.
“The banks are the beneficiaries of banking licences and the government’s guarantee on deposits and wholesale funding,” he said.
“It is not unreasonable, therefore, to expect that the banks will play a continuing role in supporting the wider financial system and thus the Australian national interest.”
Mr Rudd said such larger and more liquid institutions could provide liquidity to various market-linked investment vehicles by buying their securities at market prices.
Guarantee scheme capped but fund managers remain excluded 27-10-08
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