The Federal Government says its move to guarantee all bank deposits for the next three years does not mean there is a problem with Australian banks. 

Prime Minister Kevin Rudd has announced that the Government will guarantee all deposits in banks, building societies, credit unions or Australian subsidiaries of foreign banks. 

It will also stand behind the money that Australian banks borrow from foreign institutions as well as pumping another $4 billion into the secondary mortgage market.

A bill will be brought into Parliament soon to implement the new measures and Mr Rudd says the banks will pay an insurance premium to cover the protection. 

Banks Solid Despite Deposit Guarantee: Rudd