RBA wants our deposits insured

Deposit insurance to protect bank customers' savings might make its way onto the banking agenda after the federal election. The Reserve Bank of Australia is calling for the adoption of this approach in its half yearly Financial Stability Review. In rather guarded language, the RBA wrote in the review that: “The bank is of the view that for deposits, at least, there is merit from a crisis management perspective in a limited guarantee in the form of deposit insurance. Australia is one of the few countries without such a scheme, instead providing depositors with first claim on the assets of a failed bank.”