In light of recent bank closures in the United States, it’s no surprise that many Australians are worried if their small bank is next.
Firstly, let’s lay some soothing truth out there. It is highly unlikely that an Australian bank will go bust. Cases like Silicon Valley Bank (which is an investment bank) are very rare to happen in Australia since obtaining an official license to be a deposit taking institution is not an easy task. Most banks want to succeed and shutting its doors is the last thing on the to-do list.
Plus, the structure of banking and regulatory incentives put in place by the Australian Prudential Regulation Authority exists to prevent such a…