Investors Who Lose Money Thrown $20,000 Lifeline
Sydney Morning Herald
Tuesday June 3, 2008
PEOPLE with money tied up in failed banks or insurance companies will be paid up to $20,000 through a Federal Government scheme and not have to wait for a liquidator to get their money back.
Also yesterday the Government committed itself to the ban on mergers between Australia's four biggest banks and announced new measures to give regulators more power to monitor teetering financial houses.The Financial Claims Scheme, legislation for which was introduced into Parliament by the Treasurer, Wayne Swan, reflects a 2003 recommendation by the HIH royal commission. Key financial regulators have been considering such a scheme since 2005.The purpose is to deliver prompt payment to depositors or policyholders with banks, credit unions, building societies and general insurers that go bust. Previously, while these customers had stood first in line for payment, they had often had to wait months or years before getting any money back. The commitment to the "four pillars" policy comes after several prominent bankers, including the National Australia Bank chief, John Stewart, have suggested it should be revoked.
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