The ANZ Bank was actually the first to assess its commercial interest rates, announcing last month it would increase its three-year to 10 year loan interest rate by between 0.15 and 0.35 per cent, but drop the rate on its one and two year loans.
The banks cite the rising international cost of debt, as the main reason it has increased rates to its clients. Banks have been competing with governments recently for debt.
Treasurer Wayne Swan did not speak of the Westpac or National Australia Bank interest rate rises on the ABC’s Lateline program last night, instead condemning the action of the CBA, but effectively saying the government cannot penalise the banks, for disobeying government monetary policy initiatives.
An ALP proposal early last year whereby home loan customers can switch banks at a minimal cost is being investigated.
In the late 1980s, the banks successively increased interest rates up to nearly 20 per cent in an attempt to cover its debt commitments. This decision collapsed the capital value of real estate in the country, and sent a lot of home owners broke.