The Council of Financial Regulators has revived recommendations for a scheme to guarantee bank deposits in the case of an Australian bank or ADI collapse.
In yesterday’s RBA Financial Stability Review, the Council said that crisis management arrangements in Australia would be greatly enhanced by a scheme to repay depositors in a failed authorised deposit-taking institution (ADI) in a timely fashion.
The Council “is working on an Early Access Facility, which would provide early repayment of up to $20,000 per depositor in a failed institution,” the review read.
It estimates this cap would cover the entire deposits of around 80 per cent of depositors.
The Council is also reviewing the powers of the Australian Prudential Regulation Authority (APRA), recommending greater flexibility and power be given to APRA in making arrangements for a crisis-stricken ADI.
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