Treasury must have left something out of “the red book”, the incoming minister’s brief it prepared for Wayne Swan.
Last week, ANZ chief economist Saul Eslake admitted the banks would have upped their mortgage rates earlier if it had not been for heavying by Peter Costello. “The main reason why banks haven’t moved before this point is, to put it bluntly, because of the extraordinary political pressure exerted on banks by the previous government, and in particularly by the previous treasurer Peter Costello during the lead-up to the last election campaign,” he said.
Now, the ANZ has become the second major bank to raise its mortgage rates independent of the Reserve.
Yesterday, Swan said he would seek briefings from the Reserve and regulatory authorities to ensure banks do not take advantage of their customers. This was seen by the markets as a coded warning.
He was a little less subtle on this morning’s AM, but still seemed to give the banks the benefit of the doubt: “At the end of the day, it is a competitive market out there,” he said, “and customers can vote with their feet.”
They can – but punters like Treasurers go in against the banks with their fists swinging. Sooner or later Swan will need assertiveness training.
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