About the Scheme

The Australian Government Guarantee Scheme for Large Deposits and Wholesale Funding (the Guarantee Scheme) was announced by the Government on 12 October 2008 and formally commenced on 28 November 2008. The Guarantee Scheme closed for new liabilities at the end of March 2010.

The arrangements were designed to promote financial system stability in Australia, by supporting confidence and assisting eligible authorised deposit-taking institutions (ADIs) to continue to access funding at a time of considerable turbulence. They were also designed to ensure that Australian institutions were not placed at a disadvantage compared to their international competitors that could access similar government guarantees on bank debt.

Given the improvement in funding conditions, and the recent or imminent closure of guarantee schemes in a number of countries, the Government announced that the Guarantee Scheme would close to new liabilities from 31 March 2010. The formal notice of the closure of the Guarantee Scheme was provided in the Notice of Final Application Date and Final Issuance Date document.

Large deposits and wholesale liabilities guaranteed under the Scheme as at 31 March 2010 will remain guaranteed, for a fee, for the relevant term. Separate arrangements will continue to apply for deposit balances totalling up to and including $250,000 per customer per institution. Such deposits are guaranteed without charge.

The closure of the Guarantee Scheme has been reflected in the Scheme Rules after a short consultation period with industry representatives to facilitate a smooth exit. Further information on the changes announced on 7 February is set out in the Q&A. General information on the guarantee is in the Deed of Guarantee. Information for institutions on eligibility and reporting arrangements is in the Scheme Rules and Reporting Requirements.