The Council of Financial Regulators studied the introduction of an explicit deposit insurance levy on banks, building societies and credit unions over the last couple of years, documents
released under Freedom of Information to the Financial Review show.
Regulators canvassed a range of scenarios, with the mooted annual fee ranging from two basis points to 23 basis points of insured deposits.
Most of the documents released under FOI are an assessment of the operation of similar schemes in other countries, the governance arrangements that would be required and issues relating to investment management. The documents - which are heavily censored - also touch on the use of a deposit insurance fee within the recently legislated Financial Claims Scheme in Australia.
One scenario that recurs in the documents is how to achieve an insurance fund size equal to 0.5 per cent of covered deposits. A fee of 10 basis points would reach the target within six years and a fee of 20 bps would reach the target within three years.
A fee of 23 bps would take 10 years to generate a fund equal to two per cent of covered deposits.
On the other hand even a large fee combined with a high level of insured deposits would not be enough to generate sufficient funds to meet claims from a large banks were one to fail. That event would still require a parliamentary appropriation, one 2011 study concluded.