(5 May 2010 – Australia) According to CBA’s chief executive, Ralph Norris, banks are paying more to borrow money and the trend will continue.And while it’s easier now for banks to borrow than it was at the height of the GFC, the days of cheap wholesale funding are gone he added.
‘All of the banks have a significant portfolio of debt that has been borrowed at lower rates, prior to the start of the crisis, which has continued to roll over at higher rates,’ he told an American Chamber of Commerce lunch in Sydney.
‘And what that means is that the average cost of debt that the banks have on their balance sheet continues to rise.’
He said that before the crisis, banks had been able to borrow money at between 13 and 15 basis points above the swap rate and he does not see a return to those levels any time soon.