Hockey: Punish banks for raising home loan rates above RBA

Thursday 21 October 2010

Article by Mozo

Opposition treasury spokesman Joe Hockey has called on the government to take action against banks which continually raise home loan rates above the Reserve Bank's (RBA) cycle.

Mr Hockey suggested a number of measures for punishing banks intent on independently hiking interest rates including the possibility of increasing the fees paid to industry regulator APRA.

His comments come after a number of major banks recently confirmed the likelihood of independent increases to standard variable home loan rates as a result of higher funding costs. Such moves would likely prompt more borrowers to compare home loans and consider switching.

Mr Hockey claimed that the RBA had signalled "quite bluntly" that funding costs to the banks had flatlined.

"At the same time the banks are signalling to Australians that even if the Reserve Bank doesn't increase rates on Melbourne Cup day they may move themselves," he added.

However, other senior opposition figures have failed to back Mr Hockey's calls for measures against the banks, with Liberal MP Don Randall apparently describing the proposals as "lunatic-fringe" before realising they were from his own party.

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