Some years ago there was a bit of discussion and legislation changes. I think it was john Adams, can't quite remember. Also Robbie barwick I think. Something along the lines of bail in laws, protection for upto $250k per institution, this actually meant that say you had saint gorge and westpak over 250k they legally are the same institution, so check who owns what before you decide how you distribute your funds. Also the particular wording used in regards to the activation of said protections could actually allow for the first institution to bail in before any funds become protected. It was a while ago so not fresh in my mind. But as usual very complicated and ultimately the banks will feel the least pain and the consumers the most.
That's the $250000 question.
It would be interesting hypothetical if St George/Westpac went under, do they pay out $500000 or only $250000 as it's the same institution?
My expectation as to how banks operate when they get in a jam would be, they would pay you out in devalued dollars over a lengthy period of time, or pay you in devalued stock (who would want to own shares in a bankrupt bank?), or get the government to socialize the losses and make tax payers foot the bill through higher taxes, levies, fees, charges.
The largest mortgage holder is CBA with more than $600 billion, next is WBC with $480 bill.
Given their financial history of malfeasance, extortion, fraud, money laundering, paying off government officials to avoid jail, it would be a pleasing result to see bankers and the politicians who support such practices serve lengthy jail sentences.
The only country I'm aware of that put banksters away for a long time is Iceland.
