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The Australian Government Guarantee Scheme: 2008–15

Author

Listed:
  • Carl Schwartz

    (Reserve Bank of Australia)

  • Nicholas Tan

    (Reserve Bank of Australia)

Abstract

The Australian Government Guarantee Scheme for Large Deposits and Wholesale Funding (the Guarantee Scheme or scheme) was introduced during the global financial crisis in response to similar measures taken in other countries, and to address extreme funding pressures on authorised deposit-taking institutions (ADIs). The scheme closed to new borrowings in early 2010 and the guarantee over the few remaining liabilities ended in late 2015. This article recaps the operation of the scheme and concludes that it successfully met its objective to promote financial stability and the flow of credit to the economy during a period of extreme global funding pressures. No claims against the government were made under the scheme and the fees paid for its use generated $4½ billion in revenue.

Suggested Citation

  • Carl Schwartz & Nicholas Tan, 2016. "The Australian Government Guarantee Scheme: 2008–15," RBA Bulletin (Print copy discontinued), Reserve Bank of Australia, pages 39-46, March.
    • Handle: RePEc:rba:rbabul:mar2016-05
    as

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    File URL: https://www.rba.gov.au/publications/bulletin/2016/mar/pdf/bu-0316-5.pdf
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    References listed on IDEAS

    as
    1. Cameron Deans & Chris Stewart, 2012. "Banks' Funding Costs and Lending Rates," RBA Bulletin (Print copy discontinued), Reserve Bank of Australia, pages 37-43, March.
    2. Fabio Panetta & Thomas Faeh & Giuseppe Grande & Corrinne Ho & Michael R King & Aviram Levy & Federico M Signoretti & Marco Taboga & Andrea Zaghini, 2009. "An assessment of financial sector rescue programmes," BIS Papers, Bank for International Settlements, number 48.
    3. Aviram Levy & Sebastian Schich, 2010. "The Design of Government Guarantees for Bank Bonds: Lessons from the Recent Financial Crisis," OECD Journal: Financial Market Trends, OECD Publishing, vol. 2010(1), pages 35-66.
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    Cited by:

    1. Smith, Ariel, 2020. "The Australian Government Guarantee Scheme for Large Deposits and Wholesale Funding (Australia GFC)," Journal of Financial Crises, Yale Program on Financial Stability (YPFS), vol. 2(3), pages 576-592, April.
    2. Nassios, Jason & Giesecke, James A. & Dixon, Peter B. & Rimmer, Maureen T., 2020. "What impact do differences in financial structure have on the macro effects of bank capital requirements in the United States and Australia?," Economic Modelling, Elsevier, vol. 87(C), pages 429-446.

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