SYDNEY -(Dow Jones)- Australian banks are looking to make last minute changes to the government's proposed guarantees on deposits and wholesale lending on growing concerns the guarantees may become a permanent feature of the financial system.
Australian Bankers' Association Chief Executive David Bell Friday said banks have been in discussions with the government to ensure the finer points of the guarantees are "bedded down".
The guarantees come into effect next week.
"The growing view is that when markets do stabilize, and hopefully that will be sooner rather than later, at that time there should be a serious review as to whether these guarantees remain in place going forward," Bell said on Australian Broadcasting Corporation Friday.
"And if they do to what extent they are in place."
The government's guarantee on deposits is expected to remain in place for three years while the wholesale lending guarantee is expected to last slightly longer.
"We need to make sure we understand how we get off the drip," he said.
"We don't want to have things in place that cause unnecessary market distortions.
"Having said that there is broad acceptance of what has happened thus far and there was a need to inject some confidence into the system even though there were no problems with deposits."
Bell also said there is a view by some banks that the current A$1 million cap on the bank deposit guarantee is too high. "A number of our members have said that is the case," he said.
-By Sam Holmes, Dow Jones Newswires;
61-2-8235-2964; samuel.holmes@dowjones.com
(END) Dow Jones Newswires
November 20, 2008 17:18 ET (22:18 GMT)

Publié le 20 novembre 2008 Copyright © 2008 Dowjones