Ensure you never miss an issue of the
real estate business bulletin
RBA to investigate funding costs

RBA to investigate funding costs

by Reporter 0 comments

Staff Reporter

In a bid to determine whether or not it was appropriate for Australia’s lenders to move their rates independently of the cash rate, the Reserve Bank of Australia has launched an investigation into the true cost of funds.

Earlier this month, all four of Australia’s majors moved their rates independently of the Reserve Bank, blaming “higher funding costs”.

ANZ chief executive Phil Chronican said the bank could no longer “absorb the additional funding costs in the hope that funding pressures would ease”.

“Margins in retail and business banking have now been squeezed for a number of months and we’ve taken the difficult decision to pass on part of the higher costs to customers while we also get on with taking action to reshape the bank for tougher times,” he said.

As such, the Reserve Bank is now set to interview banking executives and release a report on the true cost of funds next month.

The investigation comes one week after French Bank Société Générale labelled Australia’s funding cost problems “dubious”.

According to research by Société Générale using publicly available data from the Reserve Bank and the Australian Prudential Regulation Authority, nearly all funding costs are falling.

“What we have seen over the last six months is that overall funding costs for Australian banks have absolutely come down. Research suggests that effectively pretty much every source of funding that they use - in terms of domestic deposits, short-term funding onshore, long-term funding onshore - has actually gone down,” Société Générale's head of strategy in Asia Christian Carrillo told the ABC

le>.b-autolinks{text-decoration:underline}.b-autolinkshadowbox { display: inline; position: relative; cursor: pointer; color: #428bca;} .b-autolinkshadowbox:hover > span { display: block !important; } .b-autolinkshadowbox__links { white-space: nowrap; z-index: 999; display: none; left: 0; border: 1px solid #bfbfbf; border-radius: 5px; font-size: 12px; top: 12px;color: #000; padding: 10px; position: absolute; background-color: #FFF; box-shadow: 0px 0px 20px 1px #bfbfbf; } .b-autolinkshadowbox__links > a { display: block; padding: 3px 0; }
RBA to investigate funding costs
lawyersweekly logo
promoted content
Recommended by Spike Native Network
Listen to other installment of the Real Estate Business Podcast
reb top 100 agents 2017

The REB Top 100 Agents ranking is the foremost ranking of agents in Australia. It has set the bar for excellence in Australian real estate. To be ranked as an REB Top 100 Agent is the standard real estate professionals strive for. See the full 2018 ranking here!

featured podcast

featured podcast
An industry where the resilient succeeds

Tim Heavyside believes that a strong support team and good foundations are paramount to success in the real estate industry, and with regu...

View all podcasts

Would you consider working for Purplebricks or a similar 'DIY' model?

Yes (7.2%)
No (80.9%)
Perhaps - make me an offer (12%)

Total votes: 209
The voting for this poll has ended on: July 13, 2018
Do you have an industry update?