The Australian and New Zealand governments have unveiled new initiatives to boost confidence in funding markets.The Australian Treasury said today that it will guarantee debt securities issued by Australian banks, locally incorporated subsidiaries of foreign banks, credit unions, and building societies. The aim of this scheme is to foster confidence and encourage continued lending by authorised deposit-taking institutions (ADIs) to national corporations, businesses and households.
The facility will be restricted to senior unsecured debt instruments with terms of up to five years, and there will be eligibility requirements for ADIs, with non-ADI lenders being excluded on grounds of lack of regulatory oversight.
On Sunday the reserve bank of New Zealand introduced a deposit guarantee scheme covering all retail deposits of participating New Zealand-registered banks, building societies, credit unions and deposit-taking finance companies.
The guarantee will also protect holders of debt securities issued by banks and other financial businesses covered by the guarantee.
In Europe today governments released the details of their planned recapitalisation programs and loan guarantees: the German finance ministry said it planned to issue €100 billion in new debt in order to set up a "financial stabilisation fund"; the French government will guarantee up to €320 billion of short-term debt (with maturities of less than five years) issued by French banks until the end of next year; and the Spanish government promised to guarantee bank debt under five years, up to a maximum of €100 billion by the end of 2008.
More on Structured Products
Regulator set to focus on backtesting and replicability of index products
The watchdog’s priorities for 2015 include drawing up new powers of product intervention
Contineo initiative set to transform structured product sector
Trade body says issuers will face unnecessary legal and compliance bills under Esma plans
Sign up for Risk.net email alerts
Sponsored video: Tradeweb
Multifonds talks to Custody Risk on being nominated for the Post-Trade Technology Vendor of the Year at the Custody Risk Awards 2014
Sponsored webinar: IBM Risk Analytics
Nominated for two technology awards
There are no comments submitted yet. Do you have an interesting opinion? Then be the first to post a comment.