Australia's banking authorities have no plans to implement key recommendations of a report by global banking regulatory body the Financial Stability Board - recommendations aimed at preventing future bail-outs of bank creditors.Their stance leaves Australia with a regulatory system potentially much more protective of bank creditors than those of most other developed nations.In a report in October, the FSB set out the rules it thinks nations should put in place for bank failures - what it calls the "key attributes of effective resolution regimes".High among these "key attributes" are requirements not to bail out large bank creditors in the event of a bank failure and to ensure that the banking system itself pays the costs of cleaning up any bank failure.Neither of the two major bank supervision bodies - the Australian Prudential Regulatory Authority or the Reserve Bank of Australia - has announced it thinks there is any need for changes to the Australian system to meet these requirements. Banking Day understands that neither wants to do so.Instead, Australian authorities are adhering to a different approach which gives them greater flexibility to bail out creditors in a bank collapse when they believe it to be necessary.It is understood that the Australian authorities prefer this approach because it can avoid problems obtaining new bank funding for a collapsed bank from funders at the same time as imposing large losses on them. Because bank depositors need banks to continue to function even when they are in trouble, it is argued, the Australian approach may lead to the best result for depositors.The Australian approach leaves local authorities in a markedly different position to most other major economies regarding their rules on dealing with bank creditors in bank collapses. Most developed nations are moving towards explicit rules against protecting more than just large bank creditors in a bank failure.Ratings agency Standard & Poor's is understood to have investigated the Australian authorities' attitude to bank creditors before this month's re-rating of Australian banks. The agency concluded that if a bank is threatening to go bust, the Australian system will probably "take proactive measures to ensure full and timely payments to senior creditors of the banking sector." It classified the Australian government framework as "highly supportive".The Australian authorities will not say publicly what might make a bank bail-out necessary, or indeed speak publicly about the approach they are taking This is because they believe that announcing a firmer policy could encourage funders to make riskier loans to banks, particularly to the Big Four.Instead, they are maintaining a policy of "constructive ambiguity" about how large creditors will fare if a big Australian bank goes bust, saying as little as possible in the hope that creditors will remain appropriately cautious.The treatment of creditors is an important part of official responses to bank collapses and crises. In many recent financial crises, large creditors such as bondholders have benefited much more than bank shareholders from arrangements to "bail out the banks", even though those creditors were professional financiers who made