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This Bank guarantee thing.....

Prospector

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OK, The government has said it will guarantee deposits up to $20,000 and is looking at extending this to $100,000. Now, if one has cashed out of shares and has some funds in the bank, (in our SMSF) and we have two separate accounts for that entity (eg a Cheque Account and a High Interest Account) with the same Bank, does that mean that each account would have this $100,000 limit?

Kind of damned if you do and damned if you dont - you sell some shares to protect from falling share prices, only to think of having an element of risk with the Bank.

I had heard it related only to personal accounts; might have to move our business cash into our personal accounts too!

I think if the Government did extend to $100,000 this would actually reduce to nil the risk of any stupid panic. Actually, probably even the $20,000 is enough.
 
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Someone posted here recently that approximately 80% of all deposits had 20K or less in them.

If that is accurate, then I would only be looking to guarantee 20K to 30K if I were in Mr. Rudd's shoes.
 

Prospector

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Someone posted here recently that approximately 80% of all deposits had 20K or less in them.

If that is accurate, then I would only be looking to guarantee 20K to 30K if I were in Mr. Rudd's shoes.

People with SMSF's have much more than $20,000 in them. As would all Superannuation Funds!
 
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People with SMSF's have much more than $20,000 in them. As would all Superannuation Funds!

Agreed Prospector. Hypothetically if you had some of your SMSF in a share portfolio and you wanted to cash in but the bank you had the account with closed how do you get your money?
 
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Let me then ask you's this, if a Big bank fell over and say there was 100,000 people with $20,000 in savings that had to be paid would the government be able to fork it out? A mere $2billion you say? what happens if 1million people have lost even say $10,000? ($10billion) what happens if a collapse happens? now imagine if they increased it to 100,000 limit? then the final question lets say they can afford to pay it out, remember its bad debt their paying off plus how long do you think it will take to receive your refund from the government?

I doubt the cashman will have you on speedial to refund your money (it could take a yr or more) and when people need the money asap i think you will find alot of unrest within people. The government should never be making promises that they cant keep (or wont wanna keep) because i can assure you if they increase the amount they will be thinkning deep down (i hope our banks dont collapse).
 

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(i hope our banks dont collapse).

The thing that would most likely cause our Banks to fall is if people panicked and started withdrawing their money, and not because of any major business issue. The Bank guarantee would most likely prevent that panic.
 
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The government should never be making promises that they cant keep (or wont wanna keep) because i can assure you if they increase the amount they will be thinkning deep down (i hope our banks dont collapse).

They leave out the detail. Could be 'Sure you're covered but you get repaid on a monthly basis when we can recover the money.' Transparancy, make sure they can deliver before such statements are made and people take them literally. They are not instilling confidence.
 
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Just to add to the problem, even if you do keep your cash safe will it be worth anything ? The hyper inflation that all the throwing of billions around like so much small change will create will mean your paper money will be worth bugger all.

Go to gold ???????????????
 
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"The new legislation seeks to introduce a Financial Claims Scheme, which would refund up to $20,000 per person for deposits in savings or cheque accounts in banks, credit unions and building societies. The Government says the $20,000 figure would cover 80 per cent of all bank accounts.

The new laws would also cover refunds for insurance policy if a giant insurer collapsed, as in the 2001 case of HIH where policy holders were embroiled in a complicated and drawn out attempt to get their money back.

When financial institutions or insurance companies collapse, the largest debts and accounts are settled first – meaning small policy or deposit holders are last in line.

Superannuation or managed funds will not be covered by the scheme, and deposits at banks not regulated by APRA will also not be insured. "

http://www.news.com.au/business/money/story/0,25479,24375006-5013952,00.html
 
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