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Australia has ruled out extending a Government guarantee to deposits held at foreign investment banks including JPMorgan Chase and UBS AG, which say the exclusion is harming their ability to source funds.
"A bank that's incorporated in Australia, that's legally regulated as an Australian institution, even if it's owned by a foreign organisation is covered by the arrangements for guaranteed deposits," Finance Minister Lindsay Tanner, 52, told Sky News.
"A bank that isn't, that's essentially just an arm of a foreign bank, is a different proposition; I don't believe we will change those arrangements."
Tanner's comment follows a report in the Australian newspaper saying the Reserve Bank of Australia had voiced concerns about the Government's decision to guarantee deposits.
Australian chief executives from JPMorgan, UBS, Deutsche Bank AG, Societe Generale, BNP Paribas and Royal Bank of Scotland Group Plc wrote to Treasurer Wayne Swan, 54, saying branches wouldn't be able to source funding if excluded.
- Bloomberg
