Which of the following statements is true?
A)In Australia, depositors received preference over other liability holders in the event of a liquidation of an FI.
B)In Australia, depositors receive preference over other liability holders in the event of a liquidation of an FI being replaced by a financial claims scheme to protect deposit accounts.
C)In Australia, only customers of the major banks are covered by deposit insurance.
D)Australia has had a well-developed deposit insurance system for decades that has protected depositors without a bank failure for over a century.

Question

Quizplus · Accepted Answer

In Australia, depositors receive preference over other liability holders in the event of a liquidation of an FI being replaced by a financial claims scheme to protect deposit accounts. While Australia does have a financial claims scheme to protect deposit accounts, it is not considered a traditional deposit insurance system. Additionally, preference is given to depositors, but this does not mean they are fully protected in the event of a bank failure. The financial claims scheme only guarantees deposits up to a certain amount per account holder and per institution.

Which of the Following Statements Is True