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Oct. 12 (Bloomberg) -- Australia's government will guarantee all deposits with institutions for the next three years to bolster confidence in the banking system amid a worsening global financial crisis.
The government will also guarantee all ``term wholesale funding'' by Australian banks operating in international credit markets to ensure they can compete against global rivals getting similar backing, Prime Minister Kevin Rudd told reporters today in Canberra. Rudd was speaking after a two-day crisis meeting with senior ministers in the Australian capital.
The measures come after the Group of Seven finance chiefs meeting in Washington pledged to take ``all necessary steps'' to unfreeze credit and money markets, without providing details. The U.K. last week agreed to guarantee loans between banks, while Ireland, Greece and Germany are among nations that have pledged to guarantee savers' deposits.
IMF says three Eastern European Countries bankrupt.....
Austrian TV, Romania, Hungary & Bulgaria are effectively broke...& Austria, which holds lots of debt in those countries, will likely follow suit.....
GERMAN FINANCE MINISTER INADVERTENTLY LETS THE CAT OUT OF THE BAG Exposure has moved mountains. Exposure of this huge corruption WILL move mountains. And the Settlements WILL be paid. It was crystal clear to all present that Herr Steinbruck knew all about the illegally blocked funds, held hostage by the Bush Crime Family-controlled White House, 'Paulson' and other operatives; and since the Editor would not yield back the microphone until the German Finance Minister had admitted this, WE ARE NOW IN A COMPLETELY NEW SITUATION with regard to exposure of this criminality. With the posting of this report, the cat is well and truly out of the bag.
Hungary had to intervene yesterday to prop up its markets following a run on country's biggest lender OTP. The Budapest bourse fell 13pc. The treasury had to scrap a bond auction.
The most new mortgages in Hungary are in Swiss francs, leaving the homeowners facing a vicious squeeze as the forint plunges against the franc.
In Pakistan, the rupee has fallen to an all-time low. Standard & Poor's downgraded the country's sovereign debt to near write-off levels of CCC-plus. The central bank's foreign reserves have fallen to $4.7bn (£2.73billion).
"The danger of default is hovering," said Professor Kaisar Bengali from Karachi University.
"Pakistan may not be able to re-pay its debt or import anything," he said, adding that the country cannot assume that it will be bailed out for strategic reasons.