"Sir John Howard" <sirjhoward@[EMAIL PROTECTED]
> wrote in message
news:1474298e-805d-4e2d-b8c3-59380c82fa35@[EMAIL PROTECTED]
> http://www.news.com.au/business/story/0,23636,23439079-462,00.html
>
> THE Reserve Bank of Australia is happy with the major banks putting up
> their lending rates beyond official moves in the cash rate because it
> helps in the fight against inflation, economists said today.
>
> The central bank governor Glenn Stevens said today it was unrealistic
> to expect the banks to move their lending rates only in line with the
> official cash rate given "the recent environment".
>
> "The relation****p between the cash rate (or, more correctly, the
> expected future cash rate) and rates on high quality private paper at
> a three-to-six month term is much looser at present than it has tended
> to be over recent years," Mr Stevens told a Sydney conference today.
>
> "This means that the cost to banks of raising funds in the market has
> moved independently of the overnight rate.
>
> "The presumption that their lending rates would and should move only
> in line with the cash rate, which had arisen in an earlier period when
> all these rates were much more closely related, has not been a
> realistic one in the recent environment," he said.
>
> Lehman Brothers chief economist Stephen Roberts said Mr Stevens's
> speech indicated the RBA was pleased the banks were putting up their
> lending rates beyond official interest rate moves.
>
> "They're certainly not unhappy with banks raising rates," he said.
> "That keeps monetary conditions tight to the extent the banks have
> been raising rates.
>
> "If the banks hadn't done that, they (the RBA) would have had to raise
> the cash rate further. The whole aim of monetary policy is to contain
> domestic spending."
>
> The National Australia Bank raised its variable home loan rate by
> another nine basis points this week, on top of a 29 basis point rise
> earlier this month, taking them to 9.36 per cent.
>
> The bank's 38 basis point increase in lending rates was well above the
> RBA's 25 basis point March rate rise, which took the cash rate to a 12-
> year high of 7.25 per cent.
>
> The Commonwealth Bank of Australia, ANZ and St George all raised their
> variable lending rates by 35 basis points after this month's RBA
> meeting.
>
> The upward movement in lending rates beyond the official cash rate
> increases was acknowledged by the RBA when it raised the cash rate
> earlier this month.
>
> -------------------
>
> Look like Swann will be wearing his brown pants for a very long time!
> ha ha ha!
Swan should be happy then.
LOL
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