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Banks' actions could set market back by 20 years

by Staff Reporter8 minute read
The Adviser

Non-bank lender Resi Mortgage Corporation has called the behaviour of the banks into question as interest rates were lifted by three of the big four banks this week to accommodate increased funding costs.

“Scaremongering by the banks over the impact of the tightening of credit markets has done the public a great disservice – which is only now becoming obvious,” said Resi’s head of consumer advocacy Lisa Montgomery.

Australian banks, according to Montgomery, strategically used the global credit squeeze to damage the reputation of non-bank lenders to claw back market share.

“At the time the major banks delivered a barrage of negative comments informing consumers that non-bank lenders would be more adversely affected [than banks]… the fall out issue from the US was clearly going to be an issue for all lenders,” she said.

With a likely rate rise due in February, Montgomery fears that the financial sector could be hurt by the big banks' actions.

“Banks may be attempting to erode the competition, but consumers must remember that they will be financially disadvantaged if the financial marketplace is set back 20 years,” she said.



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