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Rate talk borders “misconduct”

Staff Reporter 3 minute read

Jessica Darnbrough

The competition watchdog has told Australia’s big banks to stop talking about out of cycle rate hikes.

ACCC chairman Graeme Samuel told an Adelaide radio station on the weekend that “on the record” discussions between the majors about out of cycle rate hikes borders on “misconduct”.

"And it's that sort of price signalling that worries me a bit because what it's really doing is saying to their competitors, hey guys, if you lift your rates, we're going to lift them too, so you don't have to worry about it," Mr Samuel told the radio station.

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Last week both CBA’s Ralph Norris and Westpac’s Gail Kelly signalled their intentions to raise rates out of cycle with the Reserve Bank.

Speaking at a conference in Sydney last week, Mr Norris said out of cycle rate hikes were “inevitable”.

"The additional cost of liquidity and the additional cost of capital is going to put upward pressure on interest rates going forward,” Mr Norris said.

According to a recent The Adviser survey, more than 80 per cent of brokers expect to see the banks lift rates beyond any moves made by the Reserve Bank during the November Board meeting.

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