Banking reforms 'won't guarantee lower rates'

Monday 20 December 2010

Article by Mozo

Assistant treasurer Bill Shorten has cast doubt on whether the federal government's recently announced package of banking reforms will result in lower interest rates.

Banking reforms 'won't guarantee lower rates'

Announced last week, the measures aim to improve competition in the banking sector and include a ban on exit fees for new home loans and rules preventing banks from signalling their rate movements ahead of time.

However, Mr Shorten noted that while the aim of the reforms is to "improve the role of the non-four big banks" and encourage consumers to switch to better deals, the issue of interest rates would not be crystal clear.

"No one can guarantee that interest rates will go down, because partly they're set by the Reserve Bank of Australia and there are always plenty of factors coming into play," he said on Sky News's Australian Agenda yesterday (December 19th).

As the Australian newspaper commented, Mr Shorten's statement appears to soften the pledge of the treasurer, Wayne Swan, who last week claimed that the measures would "ensure that interest rates are lower over time".

The government hopes that more Australians will look to compare home loans as it seeks to create a new "pillar" in the banking system by supporting the mutual sector.

This article is brought to you by Mozo – Helping you compare home loansADNFCR-1761-ID-800302125-ADNFCR

Find great home loan deals

Which type of home loan would you like to compare?

Back to top