Rates 'chasm' won't be reversed, says Westpac
Article by Mozo
The growing chasm between the official interest rate and bank mortgage rates will never be reversed, a leading banker has suggested.
Westpac chief Gail Kelly argued that the banking industry is undergoing a major structural shift that will put an end to the days of cheap money seen before the global financial crisis, the Herald Sun reported.
According to the newspaper, Ms Kelly was "coy" on Westpac's plans for future mortgage rates but repeated her previous argument that banks are now paying much more for wholesale funding and may have to pass on the costs to customers.
She was speaking after the Commonwealth Bank this week decided to hike interest rates by almost twice the Reserve Bank's official increase.
Westpac yesterday (November 3rd) unveiled a cash profit of $5.88 billion, thereby taking the combined profits of the "big four" banks to a record $21.7 billion.
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