The Labor government decision that had the biggest impact on the financial system was the move, in October 2008, to provide a government guarantee over wholesale debt and deposits. It has also been the most controversial because of the perception that it contributed to the resurgence of the big banks over the past couple of years.The government also announced increased retail depositor protection through the introduction of the Financial Claims Scheme, under which deposits of $1 million or less with approved deposit-taking institutions were guaranteed by the government. That scheme remains in place until October 2011 and may be extended beyond that time. The guarantee scheme for large deposits and wholesale funding was closed to new liabilities on March 31.For banks other than the four majors the big issue with the wholesale guarantee was the cost of the guarantee. The fee was 70 basis points for AA-rated institutions, which was at the low end of the international range, 100 basis points for A-rated institutions and150 points for BBB-rated and unrated institutions. According to the Reserve Bank, the range was relatively high by international standards. And smaller banks, especially the A-rated and BBB-rated regional banks, continue to gripe over the unfairness of the pricing five months after access to the wholesale guarantee was closed off.Liabilities covered by the scheme at June 2010 are worth $163 billion according to Treasury, of which $157 billion was long-term wholesale funding and $6 billion was large deposits.Small financial institutions lobbied against the fee structure of the guarantee, arguing that it was anti-competitive and has had the unintended effect of further strengthening the competitive position of the four major banks relative to other ADIs.Only one member of the industry group Abacus, which represents mutuals, raised wholesale funds using the guarantee. Heritage Building Society raised $400 million.