Prime Minister Kevin Rudd has taken unprecedented action to safeguard Australia's banking system, placing the nation on a war-like footing to deal with the global financial crisis.

After two days of crisis talks with senior ministers and bureaucrats, Mr Rudd announced a three-pronged plan to further ensure the stability of the Australian financial system, including a government guarantee for up to $700 billion in deposits.

The government also will guarantee the borrowings of Australian banks in international credit markets and extend a program to shore up the mortgage market through the purchase of an extra $4 billion in residential mortgage-backed securities.

The measures, Mr Rudd said, were "designed to help unclog the arteries of the global financial system".

While assuring Australia was well-placed to ride out the financial storm, Mr Rudd likened the current turmoil to a time of war.

"There will be many bumps in the road during the period ahead and the ride will not be smooth," he told reporters.

 

>> Read full AAP story on Yahoo!7 NEWS

 

G20 leaders have agreed to a five point plan over the weekend.

• Support financial institutions
• Take measures to get credit flowing
• Assist banks in raising capital
• Reassure savers
• Restart frozen markets for mortgage-backed securities

The Australian Federal Government announced three measures to address the financial crisis:

• The government will guarantee all deposits in Australian institutions for the next three years.
• The government will guarantee all term wholesale funding by Australian banks operating in international markets.
• The government will put another $4 Billion into residential-backed securities to help shore up the Australian mortgage market.

And in an announcement set to bemuse many voters, there is a new website being established to 'watch' an industry under question.

This time, the Federal Government has also authorised a new "BankWatch" style website to monitor the cost of mortgages.

The website, to be maintained by the Australian Securities and Investments Commission, will be designed to provide customers with the total cost of various mortgage products over a defined period, including exit fees.