$1.3bn in fees for Federal backstop

Updated budget papers for the Australian government provide some more data on the use by financial institutions of the various guarantee schemes on bank liabilities.

As of 18 September 2009, so six weeks ago, Treasury estimated that authorised deposit-taking institutions' deposits covered by the guarantee on retail deposits were $16.9 billion.

This must be an error, and perhaps relates only to retail deposits of more than $1 million where making use of the guarantee is optional and attracts a fee.

Retail deposits of less than $1 million are covered for no fee. APRA and RBA estimated these deposits at around $650 billion back in May 2009.

Treasury estimated wholesale funding, covered by a separate guarantee, at $143.9 billion at September 2009.

The value of state and territory government borrowings, covered by a third guarantee, was $62.3 billion.
    
Treasury estimated the Australian government would collect $358 million extra fee revenue from the various guarantee schemes, reflecting higher than anticipated growth in demand for guarantees of wholesale deposits. This will take the annual fees paid by banks for this guarantee to around $1.3 billion.