ANZ Chief Defends Lifting Mortgage Rates
Philip Chronican, the chief of ANZ Australia, has addressed allegations the company has moved independently from the Reserve Bank and lifted mortgage rates. The chief said that the rates were adjusted not because the bank needs to increase its margins, but to recover costs.
Chronican said AZN Australia’s funding costs has increased in the last six months. He noted that the less expensive funding has matured and was replaced with more expensive funding, which reflects the current global market conditions.
The ANZ Australia chief further explained that the costs of deposits have risen as well, giving gaps to the cash rates the Reserve Bank has stipulated. The bank also paid its depositors an average amount that has risen to some 28 points since.
AZN Australia has apparently lifted its rates two times in the last few months. The bank raised six points last February and another six points for April. While its competitors have done the same in the rate of 9 to 15 points, it did so at a slower rate and still remains in line with other banks.
Chronican further added that ANZ Australia accepts the decisions it makes and the market forces at play. Funding costs continue to rise but are not welcomed by some people. He furthered that it is difficult to have a public debate on the issues when most people are not aware of the vital facts or are willing to misrepresent them.
Treasurer Wayne Swan said that that the funding costs have already gone down in recent months. He cited an entry to the Reserve Bank’s recent board minutes as the basis.
Swan is currently in Washington, committing to a $7 Billion fund for the IMF for countries needing financial assistance.