• Says cash rate lower than otherwise to offset higher credit cost.
  • Estimates cash rate around 150bps lower because of higher borrowing costs in the economy.
  • Says banks paying more due to loss of trust, tighter regulation, and competition for deposits.
  • Says Australian banks have fared better than many global peers, have higher lending standards.
  • Says regulators need to actively enforce rules, be prepared to limit financial innovation.
  • Says banks need simpler risk-management strategies.
  • Says can’t rule out zero cash rate completely due to EU crisis.
  • Says probability of a zero cash rate is “very low”.
  • Says banks need to do more to rebuild trust , sites Barclays as an example.
  • Says U.S. housing policies created large imbalances.

Aud slowly going no where at 1.0180.