The minimum period for the maintenance of these guarantees would appear to be to the end of 2011. This horizon allows for the securing of a significant improvement in the stability of economic and financial markets, with some prospects for the restoration of real growth in some major international economies. In light of past experiences during the late nineteen-eighties and early nineteen-nineties, the prospect for a similar achievement in property and real-estate markets would appear less certain.

The Group of Financial Regulators should be soon engaged in reviewing the basis for conveying into the public arena the conviction about the certainty of bank deposits and the other features related to insurers which lay at the centre of the initial work by the group. If this is not done comprehensively and communicated widely then the willingness of the political leadership, government and opposition, to grasp the challenge for abandoning guarantees domestically may be hard to secure. The perpetuation of the ramifications of the guarantees, as witnessed in the funding support for the property aspects of wealth management, brings in its train rewards for those who speculated in asset price inflation. This endorsement would be a remarkable turn of events, illuminating moral hazard.

The solution to the removal of the government guarantee of issuers in international capital markets lies with the four major banks. The costs of the guarantee arrangements are best seen in terms of the relative benefits accruing to less-well-rated rivals and the addition to costs of funds because of the guarantee fee. Thus any one or all of the four majors might refrain from seeking the guarantee when coming to bring new offerings to markets in coming months. Timing would depend on their appraisal of progress towards the restoration of market liquidity and financial strength of participants.