Editorial Banks Profit By Our Pain
Illawarra Mercury
Thursday February 7, 2008
A FEW choice words apply to the Commonwealth Bank's decision to add 0.05 per cent to the Reserve Bank's hike of 0.25 per cent to official interest rates, but one will do - obscene.
The CBA and other big banks last month raised rates outside official movements, blaming the tightening economy. And 24 hours after the central bank had another dip the CBA ratcheted up the rate further.We don't dispute the need for banks to reap rewards for their shareholders nor to insulate their positions, particularly with the prospect of recession in the US.But how can banks justify raising rates beyond official ones? We've already had 11 consecutive RBA increases.Consider too that the CBA, ANZ, NAB and Westpac made $16.7 billion last financial year, the CBA about $4.5 billion.Perhaps it's time for the ACCC to investigate collusion in the banking sector. One could be excused for thinking the banks were using these trying - and confusing - economic times to fatten up their profit lines. Not one of the major institutions is making any effort on rates to help Australian households.
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