- Bank moves do not change impact of monetary policy
- Bank mortgage rates are just one part of policy transmission mechanism
(Reuters newswires)
He is referring here to the fact that the big 4 Australian banks have broken rank with the RBA, and are adjusting interest rates independently. This, in my opinion, was a large part of the reason why the RBA didn’t cut last Tuesday, because they knew that the banks wouldn’t pass the cut on to customers. The big 4 want to be more independent of the RBA, I think they should be very careful what they wish for! Nevertheless, Mr Debelle isn’t being overly critical of the banks, acknowledging that their borrowing costs have risen.
