Bank deposits Guaranteed by Four Asian Countries

Author: Anurag Bhullar

In a move to counter the nervousness of investors and improving their faith in the banking segment, Authorities across Asian continents rushed up to expand guarantees on deposits of banks. The financial turmoil is crushing the economies around the world and banking sector is taking the maximum toll. Savers and investors are worried about their money kept in banks and feared that the financial crisis may extend its mark to Asian banks also.

Among Asian Authorities, Singapore and Malaysia on Thursday came up to offer guarantee on the local and foreign currency bank deposits until 2010. Other authorities around the globe that have already initiated the move early this week include Hong Kong, Indonesia, New Zealand and Australia.

Government authorities and analysts in this regard mentioned that these moves are only taken as preemptive measures to provide some stability in the banking system. There is no issue with the fundamentals of Asian banks and are still better capitalized with less debt obligations as compared to US and European banks.

Nervousness about the financial turmoil is viciously burning up the investor confidence in the banking system so it is better to dig out some preventive measures before the situation worsen.

The Nifty also dropped below the 3,050 mark and touched an intraday low of 3,046.60 points. It settled the day with 3074.35 points by dropping 5.96 percent below from its previous close.