So Who's Really Calling The Shots On Interest Rates?

Sydney Morning Herald

Thursday October 9, 2008

Phillip Coorey ("Scoring 0.2 of a political point", October 8) and Alan Kohler (7.30 Report, October 7) both suggest the Reserve Bank reduced its cash rate by a full percentage point in part to ensure the four biggest banks passed on 0.5 or more to customers. If they are right, one must ask which banks are controlling monetary policy in this country?

Philip Cheesman Tamarama

More good news for renters. Interest rates have decreased by 15 per cent and landlords' costs have gone down, so rents will have to decrease.

Daniel Cox Cronulla

The rate reduction will be a great relief for hard-working Australian families and should be applauded. Spare a thought, though, for those families who lost their homes in the past 12 to 18 months as a result of rate increases. Had the warnings of the impending financial upheaval been heeded by the Reserve Bank and the rate increases not been applied to stem the fear of rampant inflation, there would be more families still in their homes and fewer looking to rent at seriously inflated prices.

Will the Federal Government take steps to assist these displaced families by restoring their home ownership and ensuring that their debt is reversed in the same manner that the interest rates can be reduced to suit the banking industry?

Mike Budden Springwood

Would John Howard or Malcolm Turnbull care to comment on whether the rate cut would have been bigger under the Libs?

John Buchanan North Ryde

Philip O'Donnell (Letters, October 8) wants the full rate cut from the banks because of their "billions in profit". He is basing this statement on last year's figures. Due to the cost of borrowing money, banks' profits will surely fall drastically by the middle of next year. I would rather have a healthy bank than one balanced on a knife edge.

Julia Archer Dural

Malcolm Turnbull insisted to the end that the banks pass on the whole rate reduction. When they passed on 80 per cent, he rushed to every microphone in town to claim that without his intervention the banks would certainly have kept more.

If the unassuming Member for Wentworth can achieve so much with a few words, perhaps he should share his self-identified extraordinary abilities with the rest of the world. Could a word from Malcolm to some of those pesky overseas banks possibly avert the threatened global financial disaster?

Mira Toglin Penrith South

The definitive definition of being un-Australian is upon us: the Labor Party no longer bashes the banks and wants the rest of the community to give them a fair go. Just when you thought you'd seen it all.

Anthony Inatey Bathurst

The banks will be passing on "what they can afford". This sets the ground rules for the next time we have a rate increase. Home buyers will have to pay only "what they can afford".

Bill Collins Drummoyne

This may come as a shock to whoever compiled the "How it affects you" list in relation to the rate cut, but there are actually people in Sydney whose mortgage debt is far less than $400,000 over 25 years - the point at which the Herald's list began.

Are you completely out of touch with Mr Rudd's "working families" or do you believe those unfortunate souls paying $11,000-plus a month on a $1.4 million mortgage are more reflective of the average home owner's circumstance?

Mark Wallace Pennant Hills

What has the Herald got against self-funded retirees, we older Australians who've saved throughout our lives so we don't need to tap the public pension purse? When writing about lower interest rates ("All hands on deck, except the one on the panic button", October 8), the normally astute Ian Verrender perpetuates the myth that normal people have bills to pay but retirees have "lifestyles" to fund. Rent, food, utilities, transport, health and a host of other bills are no more "lifestyle" issues for retirees on shrinking incomes than mortgage repayments are to home buyers or school costs are to parents. C'mon Ian, give us poor oldies a break.

David Ingram Surry Hills

© 2008 Sydney Morning Herald

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