Tuesday 9 November 2010

Bank finances in pictures to compare with the Commonwealth Bank's overblown rhetoric



With Commonwealth Bank CEO Norris (of the $16M salary package) currently defending that bank's blatant cash grab when it raised its loan rate 45 points on the back of the latest official interest rate rise of 25 points, perhaps it's time to look at what The Reserve Bank of Australia had to say on domestic financial markets in November 2010:

The average cost of the major banks’ long-term
funding continues to rise as maturities are rolled over
at higher spreads. However, in recent months, this has
been largely offset by the narrowing in the spread
between bank bills and OIS rates. Overall, this suggests
that, in aggregate, the major banks’ funding costs are
likely to have been little changed over recent months,
though trends differ for individual banks depending
on their mix of funding.








UPDATE:

Commonwealth Bank chief executive Sir Ralph Norris has conceded his bank's 0.45 per cent interest rate hike will cost some of his customers their homes, a reality he says troubles him.
But in defence of his bank's Melbourne Cup Day hike, Sir Ralph said it was better to see "a few" foreclosures than have an economy hamstrung by a low-profit banking system.


Read more in The Courier Mail here.

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