Submission to the Senate Economics Committee on Bank Funding Guarantee

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The Secretary of the Senate Committee on Bank Funding Guarantee advised that the Committee is interested in having a submission from me on the guarantee scheme. Accordingly, I am making this submission. Soon after the blanket guarantee was announced, I commented on the decision in The Australian through two op-eds. I argued that it would accentuate moral hazard and distort consumer incentives and risks significantly and suggested that the guarantee be wound back. In this submission, I elaborate on some of the earlier arguments and also advance a few more for consideration by the Committee. The arguments have been supported with relevant data and literature.
Original languageEnglish
Place of PublicationCanberra
PublisherDepartment of Parliamentary Services
Number of pages19
Publication statusPublished - 2009


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