Savers have profited in post-GFC Oz, says Henry
Term deposit holders have benefited from rising returns since the onset of the global financial crisis (GFC), treasury secretary Ken Henry has said.
Speaking at a finance conference in Sydney, Dr Henry noted that the GFC prompted the banks to reduce their reliance on short-term wholesale funding and increase their deposit base by offering more attractive rates.
This, in turn, has encouraged consumers to compare term deposits as banks have competed with each other to offer the best products.
"Net savers, such as self funded retirees, are benefiting from increased returns on deposits," commented Dr Henry.
He was speaking in relation to general higher wholesale funding costs at the banks which have also served to push up lending rates.
However, Dr Henry rejected calls for greater term deposit interest rate controls, noting that many households would struggle to secure credit if banks had less freedom to decide their own rates policies.
The comments come after RBA assistant governor Philip Lowe recently claimed that Australia's "risk-averse" households have given the country a major savings boost.
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