Government earns $4.5 billion from bank guarantee

Death_to_Stock_Photography_NYC_Skyline_4Remember the Commonwealth Government bank guarantee?

Implemented in November 2008 at the height of panic during the global financial crisis, the guarantee gave the Australian financial system a much-needed injection of confidence by enabling banks to raise funds.

The scheme ended late last year. No claims had been made and the Government had earned $4.5 billion in fees.

The fears of 2008, when major companies and banks around the world were failing, are recalled in a study by Carl Schwartz and Nicholas Tan of the Reserve Bank of Australia.

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