Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1697646510261.pdf (Australia)
Australian Citizens Party ABN: 96 864 903 379 National Office: 595 Sydney Rd Coburg VIC 3058 I Postal address: PO Box 376 Coburg VIC 3058 Phone: 03 9354 0544 I Fax: 03 9354 0166 I Email: info@cit izensparty.com.au Home Page: http://citizensparty.org.au Friday, 10 July 2020 Senate Standing Committees on Economics PO Box 6100 Parliament House Canberra ACT 2600 Dear Committee, RE: Citizens Party submission on Banking Amendment (Deposits) Bill 2020 Following is the Citizens Party’s submission to your inquiry into the Banking Amendment (Deposits) Bill 2020.
We thank the committee for this opportunity to share our views on this matter, which is of grave concern to the Australian people.
Our submission explains the concerns that the Citizens Party has held since the world was shocked by the bail-in of bank deposits in Cyprus in March 2013 and the following month the G20 Financial Stability Board (FSB) revealed in its 19 April 2013 report, “Implementing the FSB Key Attributes of Effective Resolution Regimes—how far have we come?”, that “bail- in … legislation is in train … in … Australia”.
It is our view that this issue should be considered not under normal conditions, but in light of possible exceptional circumstances, such as the global financial turmoil triggered by the 2008 collapse of US bank Lehman Brothers, in which panic could force regulators to push the law to its very limits.
While the Parliament is responsible to the Australian people, the regulator APRA coordinates its actions with the Bank for International Settlements and FSB, which insist that in these matters the regulator must be fully independent of the government.
Moreover, as the FSB reiterated in its 28 June 2020 Consultation Report, “Evaluation of the effects of too- big-to-fail reforms”, of the need for broad resolution powers, including bail-in: “These powers should be available under the legal framework for the purposes of resolution and exercisable without the consent of shareholders, creditors, debtors or the firm in resolution.” (Emphasis added.)
The question the committee must ask is, under such circumstances, is there anything in the law to stop the regulator from resorting to a bail-in of bank deposits?

It is our belief that the way the law is worded there isn’t, and that this bill will rectify that, consistent with the government’s official position.
In the interests of a proper inquiry, we request the Committee schedule public hearings on this bill, to hear from the experts on this matter, including economist John Adams, banking expert Martin North, former APRA Principal Researcher Dr Wilson Sy, solicitor Robert Butler, and anyone else the Committee would choose to call.

The Citizens Party would be pleased to testify at a public hearing.
Yours sincerely, Craig Isherwood National Secretary Citizens Party Robert Barwick Research Director Citizens Party Banking Amendment (Deposits) Bill 2020Submission 160 Citizens Party submission on Banking Amendment (Deposits) Bill 2020 Contents Introduction Response to Committee’s 2018 report Other considerations Provisions of the bill Conclusion 2 3 8 10 10 Introduction The Citizens Party, formerly Citizens Electoral Council (CEC), supports the Banking Amendment (Deposits) Bill 2020.
The bill clarifies the public’s confusion over whether the broad language in the Financial Sector Legislation Amendment (Crisis Resolution Powers and Other Measures) Act 2018—hereafter referred to as the Crisis Management Act—could allow the Australian Prudential Regulation Authority (APRA) to bail in bank deposits.
The Citizens Party and thousands of Australians expressed concern about that confusion in submissions to this Committee’s 2017-18 inquiry into the Crisis Management Act, but the Committee dismissed those concerns in its 9 February 2018 report, as did the government, and the bill passed with very little debate just five days later.
However, the government and committee’s assurances that the Act didn’t apply to deposits were qualified and indefinite and, most importantly, not reflected in the language of the legislation where it mattered.

The confusion has remained, including among prominent members of the government.
The Banking Amendment (Deposits) Bill 2020 is a simple amendment that in the abundance of caution removes all doubt by explicitly excluding bank deposits from the “conversion or write-off” provisions in the Crisis Management Act.

As the government’s official position is that deposits won’t be bailed in, it should welcome this opportunity to settle the confusion and help to restore the public’s confidence in the banking system.
c,t;ur1r ti;,,, t2,rro'1fi~;{J1 2 Banking Amendment (Deposits) Bill 2020Submission 160 Response to Committee’s 2018 report In its 9 February 2018 report on the Financial Sector Legislation Amendment (Crisis Resolution Powers and Other Measures) Bill 2017 [Provisions], this Committee, under former chair Senator Jane Hume, made certain assertions to dismiss the concerns about the bail-in of deposits.

Many of these assertions were directed at the Citizens Party (CEC).
The Citizens Party will now respond to those claims to show why the issue of bail-in remains a concern.

1.

The Committee report admitted the Crisis Management Act is based on the FSB’s “Key Attributes”.

As these explicitly include depositor bail-in, it reinforces the concern about deposits.
In the section “Background”, paragraphs 1.11-1.15, the Hume report acknowledged that the Financial Stability Board (FSB) has urged member countries, including Australia, to enact bank crisis resolution frameworks in accordance with its 2011 “Key Attributes of Effective Resolution Regimes”.

The report listed the 12 subject areas of the Key Attributes, including “3.

Resolution powers”.
Resolution powers”.

In paragraph 1.14, the report admits: “The legislation proposed in the bill draws on these criteria in forming its plan for financial crisis resolution and resolution planning.” The Financial Stability Board has published the Key Attributes in full on its website.1 Under section “3.
Resolution powers”, subsection 3.5 is titled “Bail-in within resolution”, and states: “Powers to carry out bail-in within resolution should enable resolution authorities to: “write down in a manner that respects the hierarchy of claims in liquidation (see Key Attribute 5.1) equity or other instruments of ownership of the firm, unsecured and uninsured creditor claims to the extent necessary to absorb the losses; and to “convert into equity or other instruments of ownership of the firm under resolution (or any successor in resolution or the parent company within the same jurisdiction), all or parts of unsecured and uninsured creditor claims in a manner that respects the hierarchy of claims in liquidation”.
(Emphasis added.)

Senator Hume’s 2018 report therefore acknowledged that the Act draws on the FSB’s policy that includes bail-in of “unsecured creditors”.

The definition of unsecured creditors, as the Committee should know, includes depositors.

This is also clear in the bail-in laws in place in the USA, EU, UK, Canada and New Zealand, which all apply to depositors as unsecured creditors.
For example, the Reserve Bank of New Zealand is explicit that under its Open Bank Resolution2 policy, which it states is aligned with the FSB’s Key Attributes, depositors are unsecured creditors who will have their funds frozen to be used to resolve a banking crisis (bailed in): “Unsecured creditors include a wide range of individuals and entities.
At one end of the spectrum, there are large international financial institutions that invest in debt issued by the bank (commonly referred to as wholesale funding).

At the other end of the spectrum, are customers with cheque and savings accounts, and term deposits.

Whilst there are differences between different classes of unsecured creditors, they all have the same legal claim on the bank.
Each has freely invested in a private institution and has enjoyed a return on that investment whilst accepting the risks associated with the investment.

Under the OBR, it is expected that all unsecured creditors would be treated equally with the same proportion of claims remaining frozen for all depositors and creditors.”3 (Emphasis added.)
1 https://www.fsb.org/work-of-the-fsb/policy-development/effective-resolution-regimes-and-policies/key-attributes-of- effective-resolution-regimes-for-financial-institutions/#3resolutionpowers 2 https://www.rbnz.govt nz/regulation-and-supervision/banks/open-bank-resolution 3 https://www.rbnz.govt nz/-/media/ReserveBank/Files/Publications/Bulletins/2011/2011sep74-3hoskinwoolford.pdf c,t;ur1r ti;,,, t2,rro'1fi~;{J1 3 Banking Amendment (Deposits) Bill 2020Submission 160 2.
Analysis of the two Australian reports that influenced the Crisis Management Act shows the government was selective, prioritising far-reaching powers for APRA over protections for depositors.

Paragraph 1.15 of the Hume report revealed: “The changes set out in the bill also draw on the work of a number of consultation papers and reviews conducted over the last seven years, since the release of the FSB’s Key Attributes.
The legislation particularly builds on the work of two publications: a government consultation paper ‘Strengthening APRA's Crisis Management Powers’ (2012); and, the final report of the Financial System Inquiry (2014).” Strengthening APRA’s Crisis Management Powers The 2012 publication Strengthening APRA’s Crisis Management Powers4 noted that APRA’s powers were already far- reaching, specifically its directions powers.
That publication stated: “A regulated entity has a statutory duty to comply with a direction even if this may be contrary to provisions in its constitution, contracts to which it is a party, and the Corporations Act (at least in the context of the Banking Act).

This can assist the board and management of an ADI, for example, to implement a capital-raising or take other remedial measures more quickly than would otherwise be possible.” (Emphasis added.)
Paragraph 2.1.1 of that 2012 report, titled “Clarifying directions powers”, revealed APRA’s enormous powers already extended to being able to order a bank not to repay deposits: “The directions powers in the industry Acts provide an indicative list of the different kinds of directions that APRA may give to a regulated entity.
For example paragraph 11CA(2)(e) of the Banking Act allows APRA to make directions ‘to appoint a person or persons as a director or senior manager of the body corporate for such terms as APRA directs’ and paragraph 11CA(2)(m) provides for directions ‘not to repay any money on deposit or advance’.
Since the circumstances under which APRA should be able to make a direction are difficult to identify before the event, the list also includes a power to make a direction to do anything else as to the way in which the affairs of the body corporate are to be conducted or not conducted.” Strengthening APRA's Crisis Management Powers expressed concern that APRA’s “catch-all” directions power may be slightly restricted by the words “the way”, and recommended amending the Industry Acts by deleting the words “the way” to widen the scope of APRA’s directions powers consistent with the FSB’s Key Attributes: “This ‘catch-all’ direction power is intended to provide APRA with the flexibility to make directions about other matters regarding the affairs of the regulated entity.
At first sight this provision seems broadly cast.

However, it is possible that the reference to ‘the way’ in which the affairs of the body corporate are to be conducted could be interpreted narrowly to mean that directions under the ‘catch-all’ power are limited to general directions as to systemic matters, and the power might not necessarily extend to directions regarding specific transactions.
“If the provision were interpreted in this way, it is possible that a situation could arise in which APRA was prevented from issuing an effective direction on a specific matter in reliance on the ‘catch-all’ provision.

In such a case, if the situation were sufficiently serious, APRA’s only option would be to arrange for the appointment of an SM or JM.
The appointment of an SM or JM is a power reserved for extreme situations, such as where a regulated entity is not complying with directions or is, or is likely to become, severely financially distressed.

“Widening the scope of directions is consistent with international policy thinking in relation to dealing with the distress of financial institutions.
The FSB, in its Key Attributes, has identified the need for resolution authorities to have 4 https://treasury.gov.au/sites/default/files/2019-03/Discussion-Paper-1.pdf c,t;ur1r ti;,,, t2,rro'1fi~;{J1 4 Banking Amendment (Deposits) Bill 2020Submission 160 unambiguous and broad-ranging powers to respond to institutional distress.

The same argument has been advanced by the CBRG in its proposals for bank crisis resolution.
“Proposal: That the industry Acts be amended to ensure that APRA has a broad ‘catch all’ directions power that gives it the flexibility to issue directions appropriate to any situation that may arise.” The 2018 Act duly implemented this recommendation.
As the International Monetary Fund noted in its February 2019 report Australia: Financial Sector Assessment Program-Technical Note-Bank Resolution and Crisis Management: “The new ‘catch-all’ directions powers in the 2018 Crisis Management Act provide APRA with the flexibility to make directions to the ADIs that are not contemplated by the other kinds of general directions listed in the Banking Act.” This is relevant to this inquiry for two reasons: 1) it demonstrates how broad APRA’s powers already were, including powers to adversely affect depositors, before the Crisis Management Act expanded them even further; 2) it is an example of how a few words, in this case “the way”, can cause confusion and require clarification.
The government went out of its way to clarify the confusion over the catch-all directions powers in order to remove any possible obstacle to APRA exercising its catch-all power; we are asking the government and Parliament to remove the confusion over the words “any other instrument” in order to remove all doubt as to whether APRA can bail in deposits— including with its unlimited catch-all directions power.
By contrast to the government’s keenness to accept the recommendation to clarify the law in order to widen APRA’s powers, it ignored the recommendation in the same report to strengthen protection for depositors by making activation of the Financial Claims Scheme automatic.

The government retains discretion to activate the FCS, which means there could be circumstances in which the government would not activate the deposit guarantee.
Financial System Inquiry report Similarly, the Hume report referenced the recommendations of the 2014 Financial System Inquiry5 relating to developing a “crisis management tool kit” and completing the process recommended in the 2012 Strengthening APRA’s Crisis Management Powers report, to give APRA “comprehensive powers”.
Given the Hume report acknowledged the enormous public concern over the bail-in of deposits, it is curious that it did not reference the FSI report’s statement in Chapter 1: “The Inquiry specifically does not recommend the bail-in of deposits.” Neither did the government’s 20 October 2015 official response to the Financial System Inquiry report address this issue.6 The provisions of the Crisis Management Act show the government was clearly selective in accepting the recommendations of the 2012 Strengthening APRA’s Crisis Management Powers paper and 2014 Financial System Inquiry report, prioritising widening APRA’s already enormous powers over any measures to strengthen protections for depositors.
3.

The Committee report confirmed that the Crisis Management Act expanded APRA’s enormous powers—what limitation exists in law to stop APRA from bailing in deposits in a crisis?

The Hume report cited the Reserve Bank’s statement in its submission that the Crisis Management Act “removed uncertainty” as to the exercise of APRA’s powers.
The Australian Institute of Company Directors were quoted saying: 5 https://treasury.gov.au/sites/default/files/2019-03/p2014-FSI-01Final-Report.pdf 6 https://treasury.gov.au/publication/government-response-to-the-financial-system-inquiry/ C,f;ur1r~t1i~~;~,,,==========-- t2,rro'1fi~;{JJ 5 Banking Amendment (Deposits) Bill 2020Submission 160 “While the proposed powers in the Bill are extremely broad, it is desirable that, in the event of a crisis or an impending financial crisis, APRA has as many options in the ‘regulatory toolkit’ as are reasonably necessary to ensure the effective management of a crisis.” Interestingly, the International Swaps and Derivatives Association was quoted as “broadly supportive” of the reforms as “broadly consistent with the [FSB’s] Key Attributes”—the ISDA was heavily involved in the development of bail-in as a global policy from the beginning, arguing that derivatives should be exempt from bail-in, and in fact two Credit Suisse derivatives salesmen are credited with first conceiving the idea of bail-in.
The Explanatory Memorandum further elaborated that APRA’s enormous directions powers are intended to facilitate a bank resolution: In order to provide an appropriate legislative basis for the resolution planning process, it is necessary for APRA “3.36 to have a clear power to make prudential standards on resolution (see 10.17) and the power to enforce these prudential standards or otherwise require actions to facilitate resolution, through directions where necessary.
As such, the Bill clarifies that APRA’s directions powers allow it to require a regulated entity to implement appropriate pre-positioning measures to address obstacles to resolution.” The Citizens Party asks: with such enormous powers that are acknowledged to align with the FSB’s Key Attributes which includes bail-in of deposits, what specific restriction exists in Australian law to stop APRA, in an unprecedented emergency akin to the chaos in the United States in September 2008, from resorting to a bail-in of deposits?
4.

The Committee report misstated the meaning of bail-in, raising doubts as to whether the members of the committee understood the community’s concern.
The Hume report included this glaring misstatement of what bail-in is: “The term ‘bail-in’ refers to the conversion of capital instruments into cash that is then used to support an institution in distress.” No, as noted previously, the term bail-in is defined in the Key Attributes, on which the government admits the Crisis Management Act is based, as the power to “write down”, or “convert into equity”, “unsecured and uninsured creditor claims to the extent necessary to absorb the losses”.
By any definition, “unsecured creditor claims” includes deposits.

By the Committee’s own logic expressed in the report, and repeated by the government, the term “any other instrument” is entirely superfluous, reinforcing the concern as to why it is in the law.
Paragraph 2.34 of the Hume Report dismissed the Citizens Party’s concern that the wording of 11CAA Definition that “conversion and write-off provisions means the provisions of the prudential standards that relate to the conversion and writing off of: (a) Additional Tier 1 and Tier 2 capital; or (b) Any other instrument” could include deposits.

The report stated: “In this instance, the term ‘any other instrument’ has been interpreted by the CEC as being open ended.
However, as noted previously, any instrument that can be converted or written off must specifically indicate this in their terms at the time of sale.” The report quoted Treasury saying: “The operative section to which this definition applies, new section 11CAB, would only apply where an ‘instrument’ contains terms providing for conversion and/or write-off and those terms reflect requirements in APRA’s prudential standards (which are disallowable by Parliament).” (Emphasis added.)
However, in paragraph 2.26, the report had confirmed the Citizens Party’s point that all instruments containing conversion and write-off provisions in their terms and conditions are Tier 1 and Tier 2 capital instruments: c,t;ur1r ti;,,, t2,rro'1fi~;{J1 6 Banking Amendment (Deposits) Bill 2020Submission 160 It is important to note that when AT1 and T2 capital instruments are sold, they are required by law to include in “2.26 their terms, the conversion and write-off provisions, alerting the investor to the higher level of risk involved.
The explanatory memorandum specifically states that: ‘In order for the amendments to apply, any such instrument will need to be issued with terms included for the purposes of conversion and write-off provisions in APRA's prudential standards at that time.’” To reinforce this point, in paragraph 2.27 the report quoted APRA that all such capital instruments come under Tier 1 and Tier 2 capital: In answers to questions on notice from the committee, APRA clarified that its capital framework provides for “2.27 CET 1, AT1 and T2 capital in accordance with Basel III, and further, that APRA does not have any proposal to change this.
APRA also noted that any changes would be subject to consultation and other requirements of best practice regulation.” If then, as the Committee and Treasury insisted, conversion and write-off provisions can only apply to capital instruments containing conversion and write-off terms, and all such capital instruments are Tier 1 and Tier 2 instruments, why is there any need to add “any other instrument”?
This clause is entirely superfluous to the stated application of conversion and write-off, and therefore creates uncertainty.

The inclusion of the superfluous clause “any other instrument” reinforces concern that it is there to allow for an unspecified contingency, which if it is not explicitly ruled out could include a bail-in of deposits.
The report quoted Treasury alluding to the possibility of unspecified future contingency: “The use of the word ‘instrument’ in paragraph (b) is intended to be wide enough to capture any type of security or debt instrument that could be included within the capital framework in the future.

It is not the intention that a bank deposit would be an ‘instrument’ for these purposes.” (Emphasis added.)
To say “it is not the intention” that it would include bank deposits is not reassuring in the slightest—the law should be explicit on this question, especially as APRA has such enormous, intentionally “catch-all” powers.
The Explanatory Memorandum’s explanation of the “any other instrument” clause was more explicit and revealing than Treasury’s: The provisions in the prudential standards that set these requirements are currently referred to as the ‘loss “5.15 absorption requirements’ and requirements for ‘loss absorption at the point of non-viability’.

The term ‘conversion and write-off provisions’ is intended to refer to these provisions.
However, the amendments leave room for future changes to APRA’s prudential standards, including changes that might refer to instruments that are not currently considered capital under the prudential standards.” (Emphasis added.)

This explanation reinforces the concern that if it is not explicitly ruled out in law, there is nothing to stop this broad clause from being interpreted to include deposits in a bail-in—as they are in New Zealand and other jurisdictions similar to Australia.
c,t;ur1r ti;,,, t2,rro'1fi~;{J1 7 Banking Amendment (Deposits) Bill 2020Submission 160 Other considerations 5.

APRA could order banks to change terms and conditions of deposit accounts to effect a bail-in of deposits.

Following the passage of the Crisis Management Act in 2018, new information emerged that confirmed the fear that the broad language of the law could be used to bail in deposits.
Economist John Adams and banking expert Martin North tested the Committee and Treasury’s claim that “any other instrument” could not apply to deposits because it could only apply to instruments with conversion or write-off terms.
Analysing the terms and conditions of deposit accounts of the major banks, they showed that while none currently include bail-in terms, virtually all include broad terms that allow for the regulator APRA to order the banks to make changes to the terms and conditions with effectively no notice.
An independent legal opinion confirmed their analysis that this power of APRA to order changes to the terms and conditions could be used to facilitate a bail-in of deposits, by directing the banks to insert conversion and write-off terms in their deposit accounts.
As noted previously, the Explanatory Memorandum of the bill explained that APRA’s catch-all directions power enables it to order banks to “pre-position” to “remove obstacles” for a resolution, which could include a bail-in as per the FSB’s Key Attributes: In order to provide an appropriate legislative basis for the resolution planning process, it is necessary for APRA “3.36 to have a clear power to make prudential standards on resolution (see 10.17) and the power to enforce these prudential standards or otherwise require actions to facilitate resolution, through directions where necessary.
As such, the Bill clarifies that APRA’s directions powers allow it to require a regulated entity to implement appropriate pre-positioning measures to address obstacles to resolution.” This formulation in the Explanatory Memorandum confirms that APRA has the power to direct the banks to insert conversion and write-off terms in their deposit accounts with very little notice, to “remove obstacles” to APRA ordering a bail-in of deposits.

6.
6.

The Financial Claims Scheme is no protection against a bail-in of deposits.

Members of Parliament, Treasury, the RBA and APRA all assure concerned constituents that deposits will not be bailed in because they are protected by the $250,000 Financial Claims Scheme deposit guarantee.
The Hume report offered the same assurance: As discussed, the Financial Claims Scheme (FCS) provides protection to deposits held in financial institutions and “2.43 to policies with general insurers in the event that a financial institution fails.

The FCS will be activated by the Australian Government when an institution fails; and once activated will be administered by APRA.” (Emphasis added.)

This is an unacceptable misunderstanding of the FCS.
First, the FCS is not currently activated, it is not automatically activated, and the government has discretion to activate it or not.

Most Australians would be very surprised and concerned to learn the FCS is discretionary in this way, and not absolute.
As former APRA Principal Researcher Dr Wilson Sy submitted to the Hume inquiry on 14 December 2017, the mandate in the Banking Act 1959 that APRA protect depositors is balanced against financial system stability, and the law makes clear the latter has higher priority.

The entire rationale for the FSB’s policy of bailing in deposits is to ensure financial system stability.
c,t;ur1r ti;,,, t2,rro'1fi~;{J1 8 Banking Amendment (Deposits) Bill 2020Submission 160 Second, APRA explains: “The FCS can be activated by the Australian Government in the unlikely event that an ADI or general insurer fails.”7 This confirms that the FCS is intended to apply when a bank fails, whereas bail-in is intended to apply before a bank fails in order to avert a failure.
Any bail-in of deposits of an Australian bank would be ordered before the FCS can be activated, meaning the FCS could not be a protection against bail-in as the government claims and as ill- informed MPs assume.

The way bail-in works in Europe under the EU’s Bank Recovery and Resolution Directive (BRRD), where it applies to deposits, is that all deposits are bailed in, but later the insured deposits—€100,000 under EU-wide law—are refunded to the customer.
The refunding process can take months or even years, however.

Despite that, the process at least is clear in the provisions of the BRRD, whereas Australia has no equivalent framework to guarantee a similar outcome.

7 https://www.apra.gov.au/about-financial-claims-scheme c,t;ur1r ti;,,, t2,rro'1fi~;{J1 9 Banking Amendment (Deposits) Bill 2020Submission 160 Provisions of the bill The provisions in the Banking Amendment (Deposits) Bill 2020 address all of the concerns detailed above.
First, it qualifies “any other instrument” by adding the words “(not including a deposit account)”.

This clarifies any possible confusion that this clause, which is superfluous if conversion and write-off only applies to instruments that include bail-in terms, could extend conversion and write-off powers to include deposits.

Second, to put the matter beyond doubt the bill inserts a broad definition of deposits, to ensure that all possible types of deposit accounts are protected.
Third, it explicitly forbids APRA from effecting a bail-in through its prudential standards, including by APRA ordering the banks to change terms and conditions of deposit accounts to facilitate a bail-in.
This will stop APRA from using its catch- all directions power contained in 11CA(2)(p) of the Banking Act 1959, “to make changes to the body corporate’s systems, business practices or operations”, to order the banks to pre-position for a resolution by changing the terms of deposit accounts to allow them to be converted or written off.

These provisions do not change the Crisis Management Act in any way except to remove all doubt that conversion or write-off could apply to deposits.
In doing so, they ensure the law states precisely what is the official position of the government.

No longer will the government or Treasury have to equivocate with language such as “we don’t believe” or “it isn’t intended”; they will be able to assure Australians unequivocally that deposits cannot be bailed in, no way no how.
Such certainty will help to begin to restore public confidence in the banks, which is at an all-time low—surely the government and banks would welcome the opportunity to instil confidence in this way?

Conclusion The Citizens Party urges the Committee to apply an abundance of caution to the security of bank deposits, acknowledge there is ambiguity and confusion in the law which this bill will clarify, and recommend Parliament pass the Banking Amendment (Deposits) Bill 2020.
If the Australian government is genuine that, unlike its close peers New Zealand, the USA, UK, Canada, EU and Hong Kong, it will not bail in deposits, there is no downside to it or to the banks in passing this amendment.

If this committee and the government choose not to support this amendment, however, and continue to hide behind misstated claims about the Financial Claims Scheme that have been proven false, public concerns will intensify, which will undermine confidence in the entire banking system.
c,t;ur1r ti;,,, t2,rro'1fi~;{J1 10 Banking Amendment (Deposits) Bill 2020Submission 160