CBA makes bold rates move
(2 November 2010 – Australia) The Commonwealth Bank of Australia (CBA) has raised rates well above the Reserve Bank of Australia’s (RBA) official cash rate announcement, drawing harsh criticism from Treasurer Wayne Swan.
The bank announced, only hours after the RBA’s decision to raise the official cash rate was publicised, that it would be increasing its standard variable mortgage rate by 45 basis points, almost double the official increase.
Treasurer Wayne Swan has lashed out at the Commonwealth Bank for the decision.
'This is a cynical cash grab by the Commonwealth Bank - there's no other way to look at it,' Mr Swan said from Brisbane.
'I believe there will be a substantial backlash against the Commonwealth Bank, as there should be," he added.
A rate rise of this size would add about A$58 a month to a A$200,000 home loan, making repayment around A$1,518.
Opposition treasury spokesman Joe Hockey, has been in the media spotlight in the past fortnight for calling for a major review of the banking sector and his urges to the government to regulate bank interest rate increases.
'The government has now lost control of the economy; the government now owns these rate increases,' Mr Hockey said.
The Commonwealth Bank used higher wholesale funding costs since the global financial crisis to justify the move.
This excuse contradicts a recent Reserve Bank finding.
Treasurer Wayne Swan has lashed out at the Commonwealth Bank for the decision.
'This is a cynical cash grab by the Commonwealth Bank - there's no other way to look at it,' Mr Swan said from Brisbane.
'I believe there will be a substantial backlash against the Commonwealth Bank, as there should be," he added.
A rate rise of this size would add about A$58 a month to a A$200,000 home loan, making repayment around A$1,518.
Opposition treasury spokesman Joe Hockey, has been in the media spotlight in the past fortnight for calling for a major review of the banking sector and his urges to the government to regulate bank interest rate increases.
'The government has now lost control of the economy; the government now owns these rate increases,' Mr Hockey said.
The Commonwealth Bank used higher wholesale funding costs since the global financial crisis to justify the move.
This excuse contradicts a recent Reserve Bank finding.
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