Govt's bank guarantee bill passes Senate

(AAP) - Draft laws to underpin the federal government's bank guarantee scheme have passed federal parliament.

Originally, the government had thought legislation was not required to implement the
schemes that give an unlimited guarantee on deposits and wholesale funding.
But the government later decided to rush through a bill legislating for an
appropriation.
From Friday November 28, the government will guarantee the first $1 million
deposited with an Australian-incorporated bank, a credit union or a building society
free of charge.
Larger deposits will attract a fee, as will deposits from residents with a foreign
bank branch in Australia.
From the same date, short-term and long-term wholesale funding for
Australian-incorporated banks, building societies and credit unions, and short-term
funding for foreign bank branches raised from Australian residents, will be eligible
for the guarantee, for a fee.
The guarantee will apply to short-term liabilities such as bank bills, certificates
of deposit, commercial paper and certain debentures with initial maturities of up to
15 months.
The guarantee will also apply to long-term liabilities such as bonds, notes and
certain debentures with terms of maturity of 15 to 60 months.
The wholesale funding guarantee will apply to these instruments whether they are
offered domestically or in international markets.
The Australian Greens attempted but failed to amend the bill to include a sunset
clause and increased parliamentary accountability.