Sydney, 6 November, 2007: In response to advice to banks on how to price housing loans, the Australian Bankers’ Association (ABA) reiterates that pricing decisions should remain fully the responsibility of those bankers with the necessary skills and accountability to make informed decisions within the competitive market.

While no borrower welcomes higher housing mortgage rates, artificially constraining interest rates in the short-term can result in higher official interest rates as inflationary pressures are not adequately constrained.

Banks typically price loans with regard to the cost of funds, the competitive environment and the interests of its stakeholders.

Of course, if any bank makes a poor interest rate decision, the bank will lose market share and erode profit. But, importantly, the decision makers will be clearly accountable for this scenario.

For further information:

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

ENDS