Australia and New Zealand launched co-ordinated plans to safeguard their banking systems on Sunday, hoping to stem heavy losses suffered by their currencies and markets last week.

The two governments, which were previously unique among developed states in not providing any explicit deposit guarantee, pledged on Sunday to guarantee all bank deposits. Canberra went further, guaranteeing all term wholesale funding by Australian banks in international markets and doubling its pledge to purchase residential mortgage-backed securities to A$8bn.