RBA defends banks over interest rate hikes
The Reserve Bank of Australia (RBA) has jumped to the defence of the country's major lenders over their decision to increase interest rates.
Speaking at the Bloomberg Seminar in Sydney, RBA assistant governor Guy Debelle said that the eurozone debt crisis has made it increasingly difficult for banks to secure enough funds to lend to home loan customers throughout Australia.
All four of the country's major banks – ANZ, National Australia Bank, Westpac and the Commonwealth Bank – have raised rates for their mortgage holders in the past week, after the RBA ruled that the base rate would remain the same at the start of the month.
This angered treasurer Wayne Swan, who urged people to compare home loans in order to get a cheaper deal, but Mr Debelle has backed the banks' actions.
"Investors are demanding much higher compensation for bank credit risk now than they were in mid-2011," he remarked.
Chief executive at the Australian Bankers Association Steve Munchenberg recently told News Limited that one in three Aussies switched their home loan provider in 2011 and this figure could be surpassed this year.
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