Sydney, 24 October, 2007: The Australian Bankers’ Association (ABA) does not have any involvement in the pricing of bank products such as commercial or household loans.

We note comments, including by the Federal Treasurer, that variable housing interest rates should not be changed in response to higher funding costs stemming from the US sub prime lending problems.

However, retail interest rates and other prices are determined commercially by individual banks. Pricing decisions typically take into account costs, the competitive environment and other factors deemed important to the bank’s stakeholders.

Pricing decisions must also be consistent with prudential requirements.

For further information:

Heather Wellard
Director, Public Relations
Phone: 02 8298 0411
Mobile: 0409 830 439

ENDS