Chris Pearce, the Shadow Minister for Financial Services, Superannuation and Corporate Law, continues to criticise the Government’s bank guarantee, and has called on the Government to provide industry with answers around certain aspects of the guarantee and its effect on the market.
Pearce said the guarantee was rushed, poorly executed and had “significantly distorted” the Australian financial system. He said some of the effects of the guarantee included an undermining of formerly stable and reliable investments and the hampering of state fundraising efforts.
Pearce said in light of this situation, the ongoing necessity of the guarantee must be reviewed, as should the cost to the economy resulting from the distortion.
Pearce said now that the “bungled” guarantee had come into effect, “the most pressing concern is that the key questions surrounding the distortion caused by the guarantee remain unanswered and unresolved”.
Furthermore, Pearce criticised the fact that there was as yet no plan for the phasing out of the guarantee at the end of its three-year duration.
