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Consultation Paper - Financial Claims Scheme

Date:

Friday, 27 May 2011

Content ID:

2025

Abstract:

The Financial Claims Scheme protects depositors by providing them with certainty that they will recover their protected deposits (currently capped at $1 million per depositor, per institution) in the event that a bank, building society or credit union becomes insolvent. It also provides depositors with quick access to the deposit funds covered by the scheme.

The FCS was introduced at the height of the global financial crisis, so some of its settings were adjusted to address heightened concerns over global financial stability. When it introduced the FCS, the Government committed to review these settings in three years' time. It is now appropriate to review the design settings of the FCS and consider whether amendments are required in the new, post-crisis environment.

The Council of Financial Regulators (CFR), comprised of the Reserve Bank of Australia, the Australian Prudential Regulation Authority, the Australian Securities and Investments Commission and Treasury, has reviewed the FCS. The CFR has advised that the FCS in its current form is largely appropriate to the post-crisis landscape. However, it has suggested some narrowing of the scheme from the settings that were put in place during the crisis, particularly in relation to the cap on the size of protected deposits and some refinements to the existing framework. The consultation paper seeks views on the CFR's proposals. It also seeks views on the current operation of the scheme, and any impacts on industry and consumers, as this information will also be useful in considering appropriate settings going forward.

The Government welcome submissions on the questions set out in the paper, and any broader views on the architecture of the scheme, by close of business Friday 24 June 2011.

This consultation closed on Friday 24 June 2011. We are no longer accepting submissions

Documents Available:


Acrobat (PDF) documents

 Acrobat (PDF)

Consultation Paper - Financial Claims Scheme  717.70kb

Microsoft Word (RTF) documents

 Microsoft Word (RTF)

Consultation Paper - Financial Claims Scheme  565.16kb

Related Items:

Submissions: Consultation Paper - Financial Claims Scheme - 7/07/2011

Treasury received 54 submissions in response to its Consultation Paper on the Financial Claims Scheme. There were 47 public submissions, and 7 confidential submissions. The submissions that do not contain confidential material are listed below and are accessible by selecting the author.

The opinions expressed in the submissions are those of the authors and do not necessarily reflect the views of the Government or the Treasury.

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