Bank Capitalisation, page-10

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Sabbath

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22/12/14

10:44

Post #: 14495210
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Originally posted by moondoong ↑

Sabbath
I'll give it a go.

All deposit taking institutions in Australia are covered by the same government guarantee on the deposits of individuals up to a prescribed limit. Doesn't matter which institution the guarantee is the same.

So put your cash into whichever one you want because they are all as safe as each other provided you're under that limit.

If on the other hand you are concerned about the longevity or survival of a bank vs building society etc as a shareholder then that is a very different story and not as clear as one may think.

The big 4 would never be allowed to fail as such but you could certainly lose value on the shares or even be forced to give up a certain % of them in a nightmare situation.

The other smaller banks and mutuals etc. could be allowed to fail and you could theoretically lose all your money as a shareholder. But as stated above the deposits would be safe and the government would force one of the big 4 to absorb the small outfit that went under.

Please note that if things get that bad that anything like this happens the rest of the share market needless to say would be cactus as well.

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Thanks moondog, you were very close to the make however I'm confused by what you meant by but you could certainly lose value on the shares, I'm talking purely say cash in a term deposit. Once again thanks it has certainly added to my knowledge.
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