Austrian government to guarantee savings, bank liquidity

VIENNA, Oct. 8 (Xinhua) -- The Austrian government said Wednesday that it will provide unlimited protection for private savings and guarantee bank liquidity in face of the U.S.-originated financial crisis.

The decision was announced by Austrian Chancellor Alfred Gusenbauer after the Ministerial Council Meeting, which focused on how to respond to the fallout of the current financial crisis.

Austrian Vise Chancellor Wilhelm Molterer further explained that the government will offer guarantee to savers who have deposited money in all Austrian banks.

All the money deposited before Oct. 1, 2008, regardless of its amount, will be protected by the government against any loss.

Besides a guarantee for bank savers, the meeting also agreed to provide a guarantee on bank liquidity by the government.

According to the vice chancellor, if a certain bank faces liquidity problems, the Austrian Control Bank (OeKB) will compensate for it accordingly.

Wednesday's meeting also agreed that if a bank falls into trouble, the government will take other measures and give other forms of guarantee. But no bank in Austria has been in such trouble yet, said the government.

Moreover, in order to prevent risky speculation by listed companies, the Austrian government has decided to ban "short selling."

According to a research released by Austrian consumption research organization (GFK) on Wednesday, 51 percent of Austrians now consider bank deposits as the best saving methods, while only 12 percent prefer stocks.