To help facilitate the public consultation process, the Government has prepared a discussion paper outlining the key issues and questions on which the Government is seeking public comment. The public consultation process will be coordinated by the Australian Treasury.
At this stage, the Government has not decided whether any form of guarantee scheme should be introduced in Australia. The input received through this public consultation process will assist the Government to make an in principle decision on whether to implement a financial system guarantee scheme and, if so, to determine appropriate design parameters.
The Government believes a decision cannot be made without a clearer understanding of the costs and benefits that would be associated with any guarantee scheme, bearing in mind that the costs may well outweigh the benefits. Further, the Government is interested in receiving public views on the model which might be best suited to Australia’s circumstances; and, how a limited guarantee might work in practice.
The purpose of this Discussion Paper is to provide all stakeholders with a suggested framework for commenting on the issues raised by Professor Davis in his Report which will in turn assist the Government in making a decision.
The Government welcomes all views on the question of the appropriate government response to financial institution failure as well as suggestions on the design of a guarantee scheme if it was considered desirable to add such a ‘safety net’ to the existing prudential framework.
To enable the Treasury to process submissions and provide advice to the Government, interested parties are requested to provide submissions no later than 27 August 2004.
The Treasury intends to publish all formal submissions that it receives on this website, except for commercial-in-confidence or other confidential content.