Banks have no excuses for not cutting rates

Interest rates on 90-day bank bills have fallen by half a percentage point over the past three weeks leaving banks no with no excuses for not passing on interest rate cuts to borrowers said a senior executive of the Reserve Bank. Wages grew 1.2 per cent in the June quarter, for a yearly growth rate of 4.2 per cent, however the RBA is still expected to act to cut rates in September. The Reserve's assistant governor for the financial system, Philip Lowe, said the profits of the big Australian banks had doubled in five years. Despite the credit crunch profits were up 12 per cent in the last six months earnings reports. Despite being concerned about lack of competition for the banks, the Reserve ruled out intervening in the home lending market.

Source: Sydney Morning Herald