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RBA says banks should fend for themselves
August 14, 2009 02:15pm +-Print EmailShare

COMMERCIAL banks should start making their own way in the world and not be relying on the Federal Government's wholesale guarantee for funding, Reserve Bank (RBA) governor Glenn Stevens says.

The guarantee was set up late last year by the government during the heat of the global financial crisis as banks struggled to raise money on world markets.

Other countries took similar action.

"I would say we are not far now from a world where we don't really need to have the banks using these guarantees,'' Mr Stevens said during his regular six-monthly appearance before the House of Representatives Economics Committee.

The Rudd government's guarantee is opened ended, but most other countries set up their guarantees so that they expire at this end of this year, he said.

"I would think if all those countries allow that to come to fruition and the guarantee is no longer available, I can't really see why we're going to need it much longer,'' Mr Stevens said.