Moondong is correct, and the limit is AUD250,000 in deposits at ALL Aust ADI's (Authorised Deposit-taking Institutions) governed by APRA. These are domestic Banks, building socs and credit unions. So, if you are a 'retail investor', ie, a private person, with $260,000 across your St George Bank accounts, and it fails, the Govt will stand by $250,000 of it. Ultimately though, this guarantee is expected (read, "preferred") never to be used, and it's purpose is to build / reinforce the confidence of savers in the domestic Banks / Bldg Soc's and CU's.
In Aust, the Big Four are now regarded as Domestic Systemically Important Financial Institutions. This is analagous to the "Too Big to Fail" concept, and the rationale for that is if they do fail, the ramifications for the national economy with respect to loss of business confidence, financial disruption and dislocation, people losing their livelihoods etc, business failures, is too serious for a national government to allow. Here is an APRA link for further explanation... http://www.apra.gov.au/adi/Publicat...mportant-banks-in-Australia-December-2013.pdf
Traditionally, in Australia the approach taken by the regualtors (APRA and their predecessors) to bank's / bldg socs / cu's suffering financial stress through poor management, poor decisions, poor strategy etc, and all of this leading to a strong likelihood of the financial inst failing, is to have them "merged" (read "taken over") by bigger, better run, better capitalised partners. That is exactly what happened to SBV in Vic in the early 90's which was snaffled up by CBA, as SBV was on it's way down the gurgler after some disasterous lending decisions (anyone remember TriCo?). Remember Pyramid Bldg Soc as well? In recent years, we have seen a number of the small CU's be merged into better run, better capitalised CU's and Bldg Soc's as well. Ultimately, bank failures are disasterous for economies, savings and investments are lost, business and consumer confidence is badly damaged. National governments get blamed, and irrespective of their competence (or otherwise) voters punish them by kicking them out. See recent European examples in Cyprus, Iceland and Greece.
