You have to admire our banks and their lobbyists. For they have gallantly stood firm for almost four years, stoically refusing to budge even as the forces of logic threaten to engulf them.
Every few months, with regular monotony, they trot out the very same argument that ”rising funding costs have forced us to raise interest rates”.
What began as pure farce quickly degenerated into sad comedy. But now it has become downright insulting. For crying out loud, fellas, at least be a little more creative. Come up with something new, please. It’s time to put another piece of scratched vinyl on the turntable.
How about this for a lark? ”We have decided to raise interest rates because no one is borrowing much these days and we need to notch up another record profit this year. The only way we can do that is to charge existing customers more while we sack a few thousand staff.”
True, it may not win the Public Relations Industry of Australia award for the Slickest Campaign To Divert Attention from Monopolistic Behaviour award. But at least it would bear some relation to the truth. And it would be far more palatable than the guff to which we have become accustomed.
One of the great concerns, for bank shareholders as much as borrowers, is the potential harm this latest lift in rates from ANZ – and possibly its three friendly pillars – will inflict on the broader economy.
At a time when the Reserve Bank clearly is of a mind to stimulate growth with a rate cut next month, our commercial banks have their eye firmly on the short term.
Raising rates will not stimulate demand for new loans or anything else and our big four could well be laying the ground for a self-inflicted liquidity squeeze.
Let’s have a quick look at some of the myths surrounding interest rates:
1. FUNDING COSTS
A very famous physicist once postulated: ”What goes up, must come down.”
Read the rest here:
http://www.smh.com.au/opinion/politics/banks-at-risk-of-believing-own-myths-20120416-1x3ul.html#ixzz1sExsAFEQ
