Banks attract record deposits.
The recent freeze by some managed funds on redemptions has sent shockwaves through the managed funds industry.
TREASURER Wayne Swan says an investment fund manager's freeze on redemptions is not solely because of the Government's bank deposits guarantee. Other factors play a part in why investors want out of a companies financial product. Mr Swan was very supportive of the bank guarantee that was put in place because it put stability back into the financial system that might had been absent if the guarantee had not been put in place. Mr Swan said the deposits guarantee would not be extended to market-linked investments. Perpetual and AXA had frozen redemptions in $4.1 billion of investors' funds, joining Challenger Howard, the country's biggest mortgage fund, which froze $2.8 billion of redemptions earlier this week. The banking regulator, the Australian Prudential Regulation Authority, confirmed yesterday that funds were being withdrawn from institutions outside the Government's safety net.