freediver wrote on Jan 8
th, 2008 at 3:45pm:
from crikey, a bit of perspective on the itnerest rates issue:
Treasury must have left something out of “the red book”, the incoming minister’s brief it prepared for Wayne Swan.
Last week, ANZ chief economist Saul Eslake admitted the banks would have upped their mortgage rates earlier if it had not been for heavying by Peter Costello. “The main reason why banks haven't moved before this point is, to put it bluntly, because of the extraordinary political pressure exerted on banks by the previous government, and in particularly by the previous treasurer Peter Costello during the lead-up to the last election campaign,” he said.
Now, the ANZ has become the second major bank to raise its mortgage rates independent of the Reserve.
Yesterday, Swan said he would seek briefings from the Reserve and regulatory authorities to ensure banks do not take advantage of their customers. This was seen by the markets as a coded warning.
He was a little less subtle on this morning’s AM, but still seemed to give the banks the benefit of the doubt: “At the end of the day, it is a competitive market out there,” he said, “and customers can vote with their feet.”
They can – but punters like Treasurers go in against the banks with their fists swinging. Sooner or later Swan will need assertiveness training.
The Treasurer whoever he is should use all the encouragement he/she can muster to ensure banks don't act arbitrarily. Swan let Australia down by watching the fireworks as the mortgagor picked up the tab.
However any efforts should stop short of 'coded warning' which are threats. Swan is still letting Australia down with his threatening behaviour towards commercial concerns. It is now he should be watching the fireworks - the horse has already bolted.
And it worsens as Wayne Swan decides he is not the people's representative - he is the boss of everyone. Like Little Kevvy ordering the airport chiefs around Wayne has decided he can order everyone into the principal's office for a dressing down. Just who do these Liebor tyrants think they are. Have they forgotten they were voted in - they didn't stage a military coup.
Meantime the remaining banks prepare for the coming recession by making hay before the clouds appear. Watch out folks - the effects of voting for Liebor loom menacingly . . . .
Remaining banks likely to hike rates INTEREST rate rises from the rest of the major Australian banks are inevitable, according to analysts, despite pressure from the federal government and trade unions.
ANZ yesterday followed National Australia Bank (NAB) and increased its variable interest rate on mortgages, independent of any action by the Reserve Bank of Australia.
The banks cite increased costs from the global credit crisis as the key driver of the increases.
Westpac , Commonwealth Bank of Australia and St George Bank all have said their standard variable home loan rates remain under review.
Shaw Stockbroking banking analyst David McDonald said it was only a matter of time before the remaining banks follow suit.
"They are experiencing the same problems that NAB and ANZ are, so they should react in the same way,'' Mr McDonald told AAP today.
"If they don't, they might be able to win a bit of market share back, but given there is not a lot of growth in the homeland cycle anyway, it's probably not in their interest to go against the trend.''
Macquarie Research Equities expects the other majors to follow shortly with similar rate rises.
"We believe the other majors (CBA, Westpac and St George) will follow shortly with similar standard variable mortgage rate increases,'' Macquarie said in a January 8 client note.
Federal Treasurer Wayne
Swan today demanded ANZ explain its "excessive'' decision to raise home loan rates, saying the bank owes its customers and the government an explanation.
"Excessive rises won't be viewed favourably by the Australian government or Australian families,'' he told ABC Radio.
Mr
Swan has summonsed officials from the central bank, Treasury and the Australian Prudential Regulation Authority to a meeting in Brisbane today.
You boys to the headmaster's office. NOW!
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