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New regulatory requirements and intensifying competition may drive up funding costs for the big banks in the year ahead.
Treasurers of the big four told The Australian Financial Review that while pricing in global markets had eased, the banks still faced challenges in meeting an estimated $140 billion of funding requirements.
Under the new regulations imposed by the Australian Prudential Regulation Authority (APRA), the banks would be forced to have a certain amount of liquidity available to them.
ANZ treasurer Rick Moscati said that under APRA’s current proposals lending growth may have to slow and “the cost of funding lending would increase significantly.”
In the past, the banks have blamed the higher cost of funding for the decision to raise the standard variable home loan mortgage rate above that of the Reserve Bank.
Last month, Westpac lifted its standard variable rate home loan by 0.45 per cent, almost double the Reserve Bank.
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