NowInOz

All of the above were investment banks/houses. Very different organisations to retail banks. Apples and pears kind of thing. Actually more like apples and raspberries ...

Gina

haggis supper

Those were just a few examples to show how much of a surprise this last month has been. There are numerous other retail banks that have experienced major trouble - Northern Rock, HBOS, Kaupthing etc. Whilst the nature of the banking businesses differs (between Investment and Retail banks) the impacts are the same. Especially as many of the Retail Banks now have large-ish Treasury functions and sizeable exposures to derivatives. Sadly it's all very much linked.

JAJ

In most jurisdictions, there are certain banks that are considered "too big to fail". In other words, deposits with a big bank are generally safer, all things being equal, than deposits with a smaller one.

Also, deposits with a branch of a foreign bank will never have the same degree of "unofficial" local government protection.

Same applies for deposits with offshore subsidiaries of Australian banks, although some, like in the U.K., may be locally protected.

FiP

In the current climate, surely the Australian govt must put something in place to protect peoples savings in Australian banks??

How can Kevin Rudd travel the world and pass comment and opinion on other countries proposals (eg. the USA bailout) without ensuring money in banks here is protected?

People in glass houses shouldn't throw stones

haggis supper

Kind of hard to throw stones when ones head is stuck way up ones arse.

I work in the banking industry and have detected since my arrival a certain degree of arrogance and a "it can't happen to us, we're too good" mentality.

bcworld

In Australia!? Surely not.

NowInOz

So, just because the UK has a savings guarantee in place and some countries' governments now guarantee 100% of their banks (e.g. Germany), Kevin Rudd has to do the same?

I am afraid that doesn't follow! Why would we have to do something just because the Germans do it (or others)?

In some countries around the world, some banks' ratio of deposits/assets versus loans/liabilities has got out of balance due to investments those banks had that are now worthless. Therefore the governments had to put guarantees in place as otherwise no other bank would lend them money/trade with them (in simple terms).

Australian banks don't have that particular problem. Hence no need for those kinds of guarantees at the moment.

Gina

haggis supper

As someone said recently, there's nothing quite so loud as the sound of an Australian patting himself on the back

TillyG

Gah, I can't decide what to do... just saw on another thread that the rate is up to 2.55 which would make our GBP12000 into AUD 30600... but I'm too scared that it's not safe to put the money in a bank over here

NowInOz

I am not quite sure why you think your money isn't safe over here. This may help:

Of all the banks in the world there are 20 that are rated AA. Four of those twenty are in Australia! Whilst some of the UK banks are also rated AA, because of their current problems they are also rated "negative outlook/watch". Those four Australian AA banks are rated "stable".

The biggest of the four is the Commonwealth Bank of Australia. It used to be the "State Bank" but like all banks was privatised some years ago. Still - there is no way the government would let it fail.

The other big banks are Westpac, ANZ, and NAB.

You might want to stay away from the so-called 2nd tier banks like Bendigo Bank and Bank of Queensland. They don't have any problems but if you're worried stick with one of the Big Four.

Gina

TillyG

I think I'm just worried because of the fact that the UK banks will guarantee deposits of up to a certain amount but the Aussie ones won't... I guess I need to talk it over with DH and make a decision (quickly, really, while the rate is so good)

Edited to add: would probably put it into ANZ as that's who we bank with over here

graham__smith

for people moving over worried a about depositing in Australian Banks.
You could always deposit wit nationwide and then draw your cash here when you need it.
You are of course at the mercy of exchange rates but its an option.
Nationwide dont charge foreign transaction fees and you get a couple of cents less than the prevailing interbank rates when you withdraw.

In my opinion K Rudd will never legislate for deposits protection as the banks wont let him.

You have to ask yourself. If they say it will never happen here then why not offer the protection anyway.

brucekaren

If any banks start going tit up in OZ, and the government dont protect savings. Could you imagine the fall-out. Its exactly that kind of scenario and arrogance that brings governments down and riots in the streets.

Mr Grumpy

Why should taxpayers money prop up corporations failures?

I dont want my money going to support a bloody bank just because they are greedy and incompetent.

No taxpayers money for bloody banks!!

steve_and_gill

From a quick look this morning there is a bit of a difference in what would happen should a bank go under in Oz than the UK.

This is all AFAIK IANAL etc etc

In the UK, bank goes under, you get your £50k and then stand in line like every other creditor to a failed business.

In Oz the depositors are first in line for payment, for a bank to lose all money and assets so that the depositors not get paid is low (from what I've read, but can believe it) and then all creditors after that will get what is left.

This makes savings to any level seem a bit more likely to be recouped, though I will admit I basing it on best guesstimate of a banks asset and cash versus just what they can *actually* lose.