Financial crisis: Australia and New Zealand guarantee all bank deposits

Australia and New Zealand have announced co-ordinated moves to guarantee all savings deposits in banks and financial institutions amid growing concern over the fallout from the global economic crisis.
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The move comes after currencies and markets in both countries suffered heavy losses last week.
Australian Prime Minister Kevin Rudd said his government would guarantee Australia's entire deposit base of AU$600-A$700bn (£238-£278bn), including savings in credit unions and building societies, for three years.
"We are in the economic equivalent of a national security crisis, and the challenges are great," Mr Rudd said.
He referred to recent moves by other economies, such as Britain, Germany and Ireland, to extend guarantees or state aid to their banking systems and warned Australian banks could be disadvantaged if his government failed to act.
"I don't want a first-class Australian bank discriminated against because some other foreign bank, which has a bad balance sheet, is being propped up by a guarantee by a foreign government," he said.
Last week, $190 billion was erased from the Australian stock market when the benchmark S&P/ASX 200 Index slid by nearly 16 per cent. At the same time, New Zealand's NZX 50 fell by 11 per cent. The Australian dollar slid by more than 5 per cent against the US dollar on Friday alone.
But on Monday Australian shares rallied to their biggest one-day gain since October on the heels of Mr Rudd's announcement, with bank stocks making some of the largest gains despite warnings from analysts that the new-found optimism could be short-lived.
New Zealand Prime Minister Helen Clark announced her deposit guarantee scheme moments after Mr Rudd.
Speaking at the launch of her party's campaign for the Nov 8 election, she said: "Our government has agreed to implement a deposit guarantee scheme which will provide New Zealand depositors with additional confidence."
New Zealand, which is in recession, has offered to guarantee retail deposits for the next two years, with deposit-taking finance companies also included in the scheme.
Institutions with less than NZ$5bn (£1.8bn) in deposits would have accounts protected for free while those with larger deposit bases would be charged a fee of 0.1 per cent a year.
Despite the move, Mr Rudd said Australian bank finances remained in "first class financial order".
"Right now, the balance sheets look great," he said.
"This measure puts our banks on a similar footing to other banking systems around the world."
Mr Rudd said his government was in close contact with other nations, including the G-20, and coordinated action was crucial.
Mr Rudd said: "The measures I've announced today are part of international (efforts) designed to help unclog the arteries of the global financial system, critical for the international economy, critical for the Australian national economy."
The International Monetary Fund (IMF) recently said the Australian economy will not only withstand the global economic crisis, but its economy will continue to grow -- albeit at a slower rate.