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Australia, NZ to guarantee all bank deposits

world Updated: Oct 12, 2008 22:03 IST

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Australia's federal government said on Sunday it will guarantee all deposits in Australian financial institutions for three years as part of a plan to protect the nation from the global financial crisis.

The move makes the government liable for up to 700 billion Australian dollars in bank deposits. Prime Minister Kevin Rudd said the government would also guarantee the borrowings of Australian banks in international credit markets and double the funds available for mortgage-backed securities to A$8 billion (US$5.2 billion) to help shore up the Australian mortgage market. New Zealand's government is also offering to guarantee all retail bank deposits for the next two years to free up liquidity flows, Finance Minister Michael Cullen said on Sunday.