*** In concept, if not for the motivation, the levy on bank deposits to create an explicit deposit insurance scheme is not an unreasonable proposition. It is, however, one that does have some potential unintended consequences.
Google * The problem with Joe Hockey’s bank deposit tax * to get the free link.
And from catalystmoney.com.au
Deposit Guarantee
The Federal Government introduced the Financial Claims Scheme (FCS) on 12 October 2008 to guarantee deposits for all Authorised Deposit-taking Institutions (ADIs) including Australian banks, building societies, credit unions and Australian subsidiaries of foreign owned banks.
Some Australian branches of foreign banks are also covered by the guarantee.
Deposits with Catalyst Mutual are protected under the terms of the Financial Claims Scheme, together with the depositor protection provided by the Banking Act.
The Government and Australia’s banking regulator, the Australian Prudential and Regulation Authority (APRA), have highlighted the strength of Australia’s banking system in terms of capital protection and liquidity support.
On Sunday 11 September 2011 the Government amended the cap of deposits guaranteed under the scheme to $250,000 from 1 February 2012 with transitional arrangements for deposits in place at 10th September 2011.
