Year end intensifies credit crunch
Pressure on banks to lift their mortgages rates is building as global credit markets tighten. Global banks with end-of-year balance dates are working to ensure their liquidity positions, which means that the true state of credit markets will not be apparent until late January at least. At a board presentation NAB's chief economist Alan Oster said that the acuteness of the current credit shortage will not last beyond mid-2008 and that its impact in Australia would be relatively contained. ANZ's chairman Charles Goode said that it was very difficult to anticipate when conditions would improve and that, if the margin squeeze is maintained, higher funding costs would need to be passed on to more of the bank's customers.