Banks fear the rise of the Greens
The delay in finalising the election result and forming a government is stopping the big bank’s from raising rates on their standard variable home loans. "Normally, it should have happened three weeks after the election," said a banking analyst with Southern Cross Equities, T.S. Lim. "But now, this is a different case with the hung parliament."
Commonwealth Bank and Westpac are under the most pressure to raise rates because their loan books are heavy with retail mortgages. CBA last week said its funding costs had increased on five occasions since the beginning of the global financial crisis. BBY Limited banking analyst George Gabriel said Greens and Independents favour more strident regulations on banks, including disclosure over mortgage rate decisions.
Since the Greens have already laid out a banking sector policy reform agenda, no bank will want to draw attention to itself by raising interest rates out of cycle, Mr Gabriel said. The Greens support a series of reforms for banks including a fixed gap between what banks pay for funds and the interest rates they're allowed to charge borrowers. The Greens also support a ban on $2 ATM fees and fee-free basic accounts for all.
Source: The Age